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. Last Updated: 07/27/2016

Microsoft Makes Chinese Debut

BEIJING -- After three years of wrangling with China's government, Microsoft launched Chinese versions of its personal and office computer operating systems last week.

At least half of the estimated 1.5 million personal computers to be sold in China over the next 12 months will be equipped with Chinese versions of Windows 95, said Charles Stevens, vice president of Microsoft Far East.

"Fifty percent is conservative -- it may be 60 percent to 70 percent," Stevens said at a news conference after Thursday's launch inside the Forbidden City, the former imperial palace in the heart of Beijing.

Microsoft originally had sought to enter China's software market in 1993, but Beijing threatened to keep it out in anger over Microsoft's plans to use a Chinese-language version of Windows developed in rival Taiwan.

Meanwhile, Microsoft complained about rampant software piracy.

The two compromised more than a year later. Microsoft agreed to work with China in developing a new Chinese version of Windows, and Beijing pledged to crack down on copycats.

Piracy still hurts Microsoft's business, Stevens said, but conditions are improving.

The company's strategy for doing business in China has also changed.

In most countries, roughly 60 percent of Microsoft's revenues come from retail sales of PC software applications.

Because of piracy in China, Microsoft will rely on revenues from PC makers who pre-install its software, as well as from sales of data bases and other network products.

The Windows 95 version introduced Thursday features simplified Chinese characters that are standard on the mainland. Microsoft previously has sold software with the traditional characters still used in Hong Kong and Taiwan.

Later in 1996, a Chinese version of Windows NT will be introduced.

Although revenues from PC manufacturers and sales of systems software are booming this year, retail sales remain flat because of counterfeiting, Stevens said.

Stevens hopes Microsoft will sell 100,000 copies of Windows 95 at the retail level in 1996 in China. The local version of Windows 95 goes for 900 to 1,200 yuan ($108 to $145) through the U.S. group's 300 authorized dealers, while street-corner hawkers take between 20 and 50 yuan ($2.40 to $6) for counterfeit copies.