Microsoft Blaming 'Piracy' Rather Than Basic Economics For Its Struggles In China
from the econ-101-time dept
Steve Ballmer is the latest Microsoft exec to whine about how much "piracy" is costing the company in China, noting that they make so much less in that country than in the US, despite similar numbers of PCs being sold in each country. The mistake should be obvious to anyone who understands basic economics -- or anyone who's read the SSRC report on "piracy in emerging economies." That detailed study lays out, quite clearly, that the issue isn't "piracy," but business models and pricing. People in China, on average, make significantly less than people in the US, so it's no surprise that fewer people are willing to pay Microsoft's high prices. Automatically blaming the issue on "piracy" totally and completely misses the underlying reasons for the difference in revenue. It's a bit scary that someone like Ballmer doesn't seem to recognize this, because it suggests his strategy in China is not going to do much good at all.