Microsoft's Ballmer: Piracy killing our China revenue

Microsoft CEO Ballmer said that China brings in less revenue than the Netherlands due to piracy.

Microsoft CEO Steve Ballmer's tour of China has surfaced the company's piracy conundrum. According to the Wall Street Journal, Ballmer said that Microsoft will get 5 percent of the revenue from China compared to the U.S. even though both countries sell about the same amount of PCs.

ZDNet China and CNet China have been covering Ballmer's tour this week. Via Google Translate, Ballmer did address intellectual property briefly. He said that Microsoft was focusing on promoting the intellectual property movement in China and that the government was conducting "special counter-piracy activities." Ballmer also pushed quality PCs over knock-offs.

However, Ballmer didn't appear to say anything new about piracy, but the extra quantification of losses was notable. Ballmer said Microsoft appreciated the Chinese government's help on piracy. Ballmer also argued that China would benefit from better intellectual property protections because it would attract more creativity and innovative companies.

According to a handful of contacts that frequent China pirated software is plentiful. The most notable observation I've heard is that Apple appears to be selling real iPads to the Chinese via its stores. China isn't a completely knock-off free zone for Apple but the company appears to be faring a lot better than Microsoft.

Ballmer reportedly said that its revenue per PC sold in China is a sixth of what it gets in India. Chinese revenue for Microsoft is less than what it pulls in from the Netherlands.

Despite those issues, Ballmer indicated that Microsoft will continue to invest in China. In prepared remarks at an opening of a new R&D center, Ballmer said:

We're very proud of our opportunity to contribute in China. Just yesterday, we announced a new investment of up to 1.3 billion renminbi targeted at stimulating startup companies here in China, because we know the key to growth is not only our own success, innovation and prosperity, but that of our partners here in the Chinese market.

China this year will surpass the United States as the largest market in the world for personal computers, and the increasing health of innovation and intellectual property here in China will be key to the ongoing success, growth and prosperity for all.