Software piracy in AP slightly up

Average piracy rate in the Asia-Pacific region rose by 1 percent in 2005, with revenue losses totaling US$8 billion, BSA finds.
Written by Jeanne Lim, Contributor

Despite reductions in major emerging markets, the overall software piracy rate in the Asia-Pacific rose last year, according to a study released today by the Business Software Alliance (BSA). Globally, estimated revenue losses due to software piracy increased to US$34 billion.

Commissioned by the global association which encompasses top software developers, the annual global survey found that while the average Asia-Pacific piracy rate increased by 1 point to 54 percent this year, piracy rates in six Asia economies dipped.

China led the way with a four-point drop, followed by India, Singapore and Vietnam which each registered a two-point reduction.

BSA attributed the rise in the region's average piracy rate to the growth of PC markets in China and India, which increased from a combined 27 percent share in 2004 to 29 percent in 2005 of the Asia-Pacific market.

Hence, despite the reductions in the piracy rate in many Asian economies, including China and India, the higher percentage of PCs shipped in these two countries dragged up the Asia-Pacific average piracy rate, said the BSA.

The study, which was conducted by research company IDC, covers all packaged software that runs on PCs and excludes other types of software, such as those that run on mainframes or servers.

BSA President and CEO Robert Holleyman noted, in a statement, that despite the progress made by several emerging markets in reducing PC software piracy, "much more needs to be done".

"With more than one out of every three copies of PC software obtained illegally [worldwide], piracy continues to threaten the future of software innovation, resulting in lost jobs and tax revenues," he said.

Projected loss in revenues from software piracy totaled US$8 billion for the region, an increase of 1.25 percent from US$7.9 billion in 2004. A BSA Asia-Pacific spokesperson previously estimated that every dollar of a packaged software revenue generates US$1 in services revenue, and US$1 to US$2 in local channels revenue from software distribution, installation and support.

Piracy down globally
Meanwhile, global piracy rates decreased moderately in 51, or more than half, of the 97 countries covered in this year’s study. Only 19 nations saw an increase in software piracy.

The average global piracy rate of 35 percent was unchanged, from 2004, as large developed markets such as the United States, Western Europe, Japan and a handful of Asian countries, which continue to dominate the software market, saw hardly any movement in their combined piracy rate.

Global revenue losses from software piracy totaled US$34 billion in 2005, an increase of US$1.6 billion over the previous year. In countries with very large software markets, a comparatively low piracy rate could still amount to huge losses in revenue, according to BSA.

Although the United States had the lowest piracy rate at 21 percent, it registered the greatest individual country loss of US$6.9 billion. China recorded the second highest loss at US$3.9 billion with a piracy rate of 86 percent, followed by France which saw losses of US$3.2 billion at a piracy rate of 47 percent.

The previous IDC/BSA study showed that if the global piracy rate dropped 10 points, it would create as many as 2.4 million new jobs, US$400 billion in economic growth, and US$67 billion in tax revenues worldwide.

The four countries with the largest percentage point drop in piracy rates during the past year were Ukraine with 6 points, and China, Morocco and Russia at 4 points each.

The countries with the highest piracy rates were Vietnam at 90 percent, Zimbabwe at 90 percent, Indonesia at 87 percent, China at 86 percent, and Pakistan at 86 percent.

The lowest piracy rates were recorded in the United States (21 percent), New Zealand (23 percent), Austria (26 percent) and Finland (26 percent).

John Gantz, chief research officer at IDC, said in the statement: "Many factors contribute to regional differences in piracy--the strength of intellectual property protection, the availability of pirated software, cultural differences and IT-related market trends."

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