Only about $1.25 billion.
That’s about one-fiftieth of the company’s total revenue.
But that could rise to almost $7.5 billion if the Chinese would just crack down on software piracy as effectively as India has.
In a speech to employees in China today, Steve Ballmer said that the number of PCs sold in China is about equal to the number in the U.S., but “our revenue in China will be about a twentieth of our revenue in the United States.”
Last year, Microsoft said that about 40% of its total revenue of $62.5 billion came from North America. That’s about $25 billion — most of that from the U.S.
Divide by 20, and you end up with about $1.25 billion.
Ballmer also said that the company earns six times as much per PC sold in India as it does in China, thanks to India’s stricter piracy controls.
Microsoft has tried to fight piracy in China for more than a decade, investing in local software joint ventures and R&D centres — the reasoning being that China will be more likely to enforce piracy laws if it has a domestic software industry to protect — and using technology like Genuine Advantage software, which can lock a PC if it’s found to be using counterfeit Microsoft software.
The company has to strike a balance: if it cracks down too much, angry consumers might pick other software like Linux instead. In that case, counterfeit Windows is better than no Windows, as it creates demand for apps that run on Windows and can create long-term loyalty.
But Ballmer appeared to reject that argument, saying: “I’m not saying everybody in China could afford to buy a PC… but if you can, you could afford the software.”