Microsoft announced plans Sunday to cut the retail price of its Windows operating system and Office productivity suite software by as much as 60% in China, hoping to win back customers currently running pirated versions of the software or China’s Red Flag Linux, state media reported. Windows XP Home Edition will be reduced from RMB960 (US$139) to RMB399 (US$58) and Microsoft Office will be cut from RMB699 to RMB398. Critics say Windows XP’s high pricing, equivalent to one month’s income for a Beijing city resident, was to blame for the company’s slowing sales growth in China and software piracy. When Microsoft experimented with reducing Office pricing last October, actual sales were 10 times greater than prior estimates, leading Microsoft to reconsider its pricing strategy. An update released earlier this year that caused desktop backgrounds on pirated versions of Windows to go black sparked a backlash against Microsoft among Chinese users.
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