Microsoft Office in China Retails for $29

By Kevin Parrish, published on July 22, 2009 at 5:01 PM
Source: Tom's Guide US | Keywords: , , , | Themes: Software
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Microsoft is selling Office in China for a meager $29. Jealous?

A recent article posted on BusinessWeek discusses Microsoft's new "pricing strategy" that cuts the prices on Windows and Office products. But what really struck a true nerve in the article was the fact that Microsoft has chosen to offer Office in China for a measly $29.

Why is the country getting such an amazing deal? The company blames piracy, stating that 95-percent of the Office installations in China are illegal. Because of this factor, Microsoft is testing the new, dirt-cheap pricetag.

The result? An 800-percent increase in sales since the trial began in September 2008, with an estimated 80,000 copies sold since then. Pleased with the results, Microsoft even said that it plans to keep the new pricetag.

Worldwide, unit sales of Microsoft Office have spiked 415-percent, stemming from not-quite-so-low price points in Brazil, India, and more countries.

So what gives? Why are consumers rooted in the West to pay over $200 for Microsoft Office 2007? One of the biggest arguments surrounding piracy is overall pricing, whether it's related to Microsoft, Adobe, or the latest PC game. If prices were brought down to reasonable levels as seen in China, perhaps piracy wouldn't be quite as problematic.

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Comments

neon neophyte 07/22/2009 11:16 PM
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consider that your average chinese rice farmer makes about 150 dollars a year american, that might put that price in perspective.

a chinese gold farmer (mmorpgs) makes more money than a chinese rice farmer. of course.. chinese gold farming is now illegal.

Rab1d-BDGR 07/22/2009 11:20 PM
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In communist China, Microsoft Pirates you!

eskimo_1 07/22/2009 11:34 PM
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If you can't beat em join em?

lukeiamyourfather 07/22/2009 11:46 PM
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So the moral of the story is pirate software and media until only 5% of the population has legitimate product and then prices will be reasonable. Seems kind of bass akwards.

agnickolov 07/22/2009 11:47 PM
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I'm sure it's still more expensive in the local Chinese market than it is in the US, relatively speaking.

mitch074 07/22/2009 11:48 PM
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I'll keep using OpenOffice.org: be it in the East or West, it's still $0.

hopiamani 07/22/2009 11:52 PM
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It's called price discrimination, check the wiki

cracklint 07/22/2009 11:54 PM
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china should knock that discount off the debt America owes them.

Kryan 07/23/2009 12:03 PM
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cracklint :
china should knock that discount off the debt America owes them.



America's debt is their own fault, not China's. so no, no debt reduction for credit hungry Americans (I am generalizing, but your country's financial deficit *is* a cold hard fact).

Moving on to the whole $25/Office thing. "Relatively speaking" doesn't cut it in the computer industry, world-wide, in my opinion. Otherwise one would assume that said chinese rice farmer would be able to buy his hardware for 1/8th of the price I pay? (think high-end gfx cards and suddenly, popping to China to buy 2 or 3 cards to bring back might work out cheaper, INCLUDING the airfare...

hmmm.

neon neophyte 07/23/2009 12:07 PM
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kryan, your anology fails in that, software... has little overhead. it doesnt cost microsoft lots of money to make software for china. the software already exists. producing copies costs next to nothing. hardware has a real pricetag on it. producing silicon and tying it all together, isnt cheap. you cant sell something for less than what it costs to make it (ok yes you can, and they do.. in certain scenarios, like console gaming.)

tomasf 07/23/2009 12:14 PM
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it is just fair, they should do the same in Latin America. game vendors should follow microsoft initiative

zelog 07/23/2009 12:26 PM
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Yet, something actually produced in China and sold across the world, will also cost less in China. They're being pleasantly treated both ways, while US money goes down a one-way street and everybody thinks that's just how things work. Brilliant.

Anonymous 07/23/2009 12:50 PM
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$150 US a year. Where do you people come up with this stuff? Talk about perspective. So the average rice farmer in China buys a computer and that's their whole yearly earnings. Now they gotta come up with that 29 extra bucks to buy a copy of office. Wait they use office while farming. Perspective.

doc70 07/23/2009 1:01 AM
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beyond the fair/unfair price issue, the increase in units sold should actually teach a lesson to the game producers; how about cut your profits a bit and sell games for, say, 30 bucks max, instead of 50-60, and sell more copies that way? Besides, that would cut piracy a great deal and you would save money by not having to license that stupid DRM solutions from third-party providers. Consumers would win by not being harrased with DRM and by paying less for games; companies would win by selling more copies and actually maintaining a fan base; the only loser would be the DRM provider left without clients... but that's OK, they can go belly-up or switch to honest work for a change...
Just my 2 cents...

Cache 07/23/2009 1:12 AM
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In layman's terms, the rest of the world is subsidizing China because the Chinese would prefer to steal everything. And yet if *I* stole a copy, I would be arrested and prosecuted (presumably beaten in prison by Ballmer as well). So... how many copies of Office need to be stolen in America before Microsoft rewards the rest of us with more reasonable pricing?

cruiseoveride 07/23/2009 1:36 AM
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Open Office in China Retails for $0.00

= infinity % cheaper

azxcvbnm321 07/23/2009 1:41 AM
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Reasonable pricing? Considering that the average American makes, what, $35000 a year and the average Chinese $2000? To put it into perspective, Office costs 165 Yuan approx. A good monthly wage in Shanghai, the most prosperous and highest wage city (excluding HK) is 3000 Yuan a month. The price Chinese are paying are roughly the same, actually more expensive, than what Americans are paying for Office based on income.

This is why capitalism is such a good system, the best we've discovered to date. Microsoft doesn't care about fairness, it's pricing is to maximize total profits. But it needs buyers to get profits so it has to reduce the price to the point where buyers can afford the product. This turns out to be "fair" even though fairness never entered the pricing decision, it was an outcome thanks to how capitalism works. I'm talking about market based capitalism which depends upon competition. Windows pricing is not going to get the benefits of market capitalism since Microsoft has a monopoly and are able to avoid market forces. I recently had to restore my Windows XP, only problem is that I lost my PID code. It's hard to get that code off of my old computer without a working OS and Microsoft deliberately makes it very hard. It woudn't be able to do that without a monopoly, which is why competition is important, it is what makes capitalism work well and makes outcomes fair.

Rab1d-BDGR 07/23/2009 2:11 AM
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Acording to the article there was an 800% increase in sales. i.E. For every copy they previously sold they now sell nine: 9*$29 is $261 dollars. In the west its apparently $200 per copy, so selling at $30 instead of $200 would increase their profits by 30.5%

....right? ^_^

icepick314 07/23/2009 2:18 AM
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so can i buy that license key for $29 too?

dingumf 07/23/2009 2:20 AM
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Piracy and China. Hmmm...

blarneypete 07/23/2009 2:36 AM
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There can be a lot of in-depth discussion about this price move - but here's my two cents:

If Microsoft charged me $30 for MS Office instead of $200, I wouldn't be using OpenOffice right now. And I wouldn't be tempted (as much) to get a pirated copy. And then Microsoft would get more money - my money. How does anybody lose doing this?

tacoslave 07/23/2009 3:10 AM
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why cant they do this in Mexico?
no ago tanto dinero yo para estar dandolo al pendejo de balmer.
seriously i only make around 25k a year. By the way electronics are more expensive over here :( i spent my months sallery on a flat screen and building my pc with a *legit* copy of windows.

blarneypete 07/23/2009 3:57 AM
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pendejo de balmer :)

scryer_360 07/23/2009 3:59 AM
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$30, Microsoft makes money. Just letting us know how badly MS is ripping us off here. MS wouldn't offer Office at all at $30 if it couldn't make money on it. More proof MS could give a crap less about its customers, its just happy to live in the loop.

truehighroller 07/23/2009 3:59 AM
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I actually bought my Office 2007 Ultimate for $69 and some change. I was very happy and jumped right on that. It was a special that I ran across for students in college. I found the deal online some where. I still have the link for any one that wants it. Now it is $59


http://www.microsoft.com/student/d [...] fault.aspx

computabug 07/23/2009 5:06 AM
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This makes us westerns want the pirate all the more...

tayb 07/23/2009 5:16 AM
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Let them steal it or sell it at a reduced price, get people addicted to it, and slowly raise the price. Seems like a pretty smart business plan to me. Let the bitching continue.

Oh, and I laugh at the guys saying "this makes me want to pirate it even more" as if you weren't already going to steal it anyways. Go on.

doomtomb 07/23/2009 5:52 AM
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So to fix this: The West needs to pirate more and force Microsoft to lower their prices.

azxcvbnm321 07/23/2009 6:12 AM
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A lot of Americans are spoiled. Dude, you aren't entitled to everything, it's not your right to have what you want, if you think the price is too high, then don't buy it. I use Open Office too because I think MS Office is too expensive, but I have no right to use MS Office for free.

You are not entitled to what someone else produces, period. If Microsoft wants to raise the price of Office to $1000000, then they should be able to and you have no right to steal that. It's not yours and no one has a duty to make it affordable or provide you with it. Market forces encourage sellers to make their products/services affordable, but if they lower the price for you, they usually have to lower for everyone (in order to avoid anger, other issues that hurt image, etc.). But if in the end you are unable or unwilling to pay, then so be it, that's your choice as it's theirs not to sell it to you. They have no right to force you to pay and you have no right to steal the product.

Cletus_slackjawd 07/23/2009 6:17 AM
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Latin America has probably the most disproportionately priced software to median wage in the world. Almost every town has their "Paraguay Fair" with illegal copies of software and movies, and for good reason. They cannot afford the high tariff on imports of these items.
Even the wealthier won't spend money on a legit copy of office/windows etc. The price equates to paying for a daily housemaid for a month.

okibrian 07/23/2009 6:33 AM
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Yeah, but China is going to block Word, Excel, Access, Power Point and all Outlook mail. :-)
But seriously, piracy does pay. That's the moral of the story here.


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