Company's revenue in nation lags far behind that in United States

BEIJING - Microsoft Corp is working on a five-year plan for accelerated growth in China, where it has invested extensively but faces challenges in monetizing the full potential of the world's largest PC, mobile phone and Internet market, a senior company executive said on Monday.

Jean-Philippe Courtois, senior vice-president of Microsoft and president of Microsoft International, said that his company is working on the plan for the company's 2013 to 2017 fiscal years, which start in July.

Courtois, who is in charge of Microsoft's sales and marketing activities outside the United States and Canada, said he is dedicated to enabling much faster growth in China, which is his company's priority and his priority in international expansion.

"We want to be much more visible in China and much more into the day-to-day life of the hundreds of millions of people and all the businesses in China in the years to come," Courtois said.

China has been a focus for the software giant and has its most comprehensive facilities outside the US.

However, Microsoft's financial performance in China is far behind that of its home market in the US.

Steve Ballmer, Microsoft's chief executive officer, said in May that the company's revenue in China this year will be around 5 percent of what it gets in the US due to China's piracy problems, according to a report by the Wall Street Journal in May.

Ballmer's statement suggests that Microsoft's China revenue is around $2 billion. Microsoft reported its revenues in the US were $36.2 billion out of a global total of $62.5 billion, according to its fiscal report for the year ended June 30, 2010.

Courtois declined to reveal Microsoft's performance in China, saying only that the "market growth is fast and ahead of the company's expectation".

He also said that the company is well positioned to embrace the trend of consumerization of IT and cloud computing, which means Microsoft is transforming from a software company to a leading company in devices and cloud computing.

The company is keen to seize the opportunity brought by the mega IT industry trends in China, which include devices and cloud computing, according to Courtois.

While competitors such as Apple Inc and Google Inc are taking up the consumer markets worldwide, Microsoft decided to reform its structure in China to tap the wave of consumer spending on electronics and technology.

Courtois said Microsoft China, based on global strategies, has established a consumer channel group, so that it can integrate all related resources to handle the challenges, especially with the popularity of Apple's iPhones and iPads and smartphones using Google's Android.

Simon Leung, head of Microsoft China, said this year that the shipment of smartphones in China could be about 80 million and may rise to 100 million units next year.

Microsoft has been working with phone makers including Nokia, HTC, Samsung and ZTE on the development of Windows Phones.

Nokia has started to deliver Windows Phones in Europe, but the launch date in China has not been decided, although the Finnish phone maker said it will be sometime in the first half of next year.

China Daily

(China Daily 11/22/2011 page16)