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Ballmer Says China Intellectual Rights Protection ‘Weak’

Microsoft Corp. (MSFT), which is preparing to roll out its new Windows operating system, sees intellectual property protection in China as “still weak” making it difficult to sell legitimate software, Chief Executive Officer Steve Ballmer said.

Still, Ballmer is “super excited” about growth in the China market, which is unique in being the largest for both phones and personal computers and is the fastest growing, he said in a speech at Peking University in Beijing yesterday.

U.S. Ambassador to China Gary Locke last month said China’s lack of protection for intellectual property rights is hampering companies doing business in the country and that strengthening enforcement needs to be a top priority. The country’s illegal software market was worth almost $9 billion last year, versus a legal market of less than $3 billion, according to the annual report of the Business Software Alliance this month.

China is a market that adopts technology, and yet China is a market where intellectual property protection is still weak,” Ballmer told more than 2,000 students. “In Microsoft’s case we are fortunate we can sell our products outside of China. For a Chinese developer, it’s probably tougher because your domestic market is a tough one in which to really sell software.”

Ballmer also met Vice Premier Wang Qishan yesterday, Xinhua News Agency said. Wang said provincial governments will be using authorized software by the end of June and city and county governments will be in compliance by the end of 2013, the official news service reported yesterday. Central government organs “accomplished this goal” last year, Xinhua said.

Windows 8

Microsoft plans to challenge Apple Inc. (AAPL)’s dominance in tablet computers with Windows 8, a new operating system version designed to run touch-screen devices. The software is scheduled to go on sale around October, people with knowledge of the matter said in March.

Ballmer yesterday predicted that next year the same audience will be full of people carrying Windows phones. Windows 8 is almost like a new operating system and a complete “reimagining” of the Windows system to work on all devices from phones to tablets to desktop computers, he said.

More than 103 million tablet devices will be sold in 2012, with sales tripling to 326.3 million in 2015, researcher Gartner Inc. estimates. Apple’s two-thirds share of the market the year will probably drop to 46 percent by 2015, while Microsoft’s will climb to 11 percent, according to Gartner.

Ballmer’s address came a year after the company pledged to invest as much as 1.3 billion yuan ($205 million) to stimulate startup companies in China, and the opening of a new research and development campus in Beijing.

To contact Bloomberg News staff for this story: Edmond Lococo in Beijing at elococo@bloomberg.net

To contact the editor responsible for this story: Michael Tighe at mtighe4@bloomberg.net

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