[prole]

This quote was a generalization, but aimed at ordinary users. As mentioned in this article describing Microsoft's efforts in China (http://money.cnn.com/magazines/fortune/fortune_archive/2007/...), after years of failed attempts, MS was able to turn its image around from hostile to gentle software giant and convince the government to "go genuine." In order secure those buyers, MS drastically cut prices, but given the enormous number of Chinese government users, it's probably still netting a decent fortune.

As for those ordinary users who often trawl underground software/movie markets, they are the ones who will probably never be tempted to "go genuine." They aren't under pressure from the MS/PRC back-scrubbing to do so. It's likely that most people don't need to find a Windows CD if they've already purchased a computer with it pre-installed, but anything else is open game. The vast majority of these ordinary users are purely driven by cost, and if they're buying the cheapest pirated CDs (hey, even pirates have to compete), that money isn't making it's way back to Microsoft.

As an aside, the biggest reason why I would never buy from these markets in China is that some of the software is infected with trojans. "You get what you pay for," right? ;)

[DenisM]

In other words Microsoft has sewn up the preinstalled PC market and the government market (the two biggest markets), and have left after-market to pirates (the smallest market).

Surely your Microsoft won't see a red cent from the Chinese was more than a little exaggeration?