Summary
Microsoft has signed an agreement with Founder Technology Group to have its software pre-installed on PC's distributed for use in China. This move is hoped to combat widespread Chinese product piracy.
Analysis
China with all of its promise to provide cheap prices on goods for the global economy has a dark side. This dark side comes in the form of 'copied' goods and piracy of intellectual property rights.
Microsoft in an effort to prevents it software from being illegally used is having the software preloaded on PC's (both desktops and laptops) from the top makers in the region.
While this is a good idea, it only addresses one part of the issue.
The PC itself is a 'copied' product. These so called knock-offs will continue to allow 'copied' software to thrive in a region known for its ability to copy and distribute unauthorized goods.
The only real solution is to offer the original products at a fair market value price. That way the price difference between a copied product and legitimate product will be so low that the end customer will want the real thing.
We all know that it is hard to compete with 'free' but there does come a time when even the copied product does have a cost associated with it and that is when the price point makes a difference.
A good example of fair trade is the recent release of the new Radiohead cd. The band itself let the customer decide how much they want to pay for the product. This is a unique business idea. One that was successful for the bands and fans.
This is the model of the future and in the digital world we have to come to grips with the fact, that the lion was let out of the cage in regards to content.
The business model now needs to shift to make it profitable even in the age digital age of 'free'/'low cost' software.
