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Why Microsoft Is Trying to Strengthen Its Presence in China


Nov. 20 2020, Updated 1:31 p.m. ET

Microsoft aggressively trying to strengthen presence in China

Previously in this series, we discussed Microsoft’s (MSFT) joint venture with CETC (China Electronics Technology Group), under which the Chinese government and its institutions would get access to a customized version of the company’s recent Windows 10 OS (operating system).

Prior to this, Microsoft partnered with Baidu (BIDU), China’s dominant search engine, to promote the Windows 10 OS. Baidu has the highest penetration rate among all search engine players in China (YINN), with 92% according to the CNNIC (China Internet Network Information Center). Apart from Baidu, Microsoft has announced partnerships with other leading Chinese companies, including Tencent Holdings, Lenovo (LNVGY), and Xiaomi, to accelerate the adoption of Windows 10.

Microsoft’s recent attempts to lure China show the company’s desperation to reach out to the massive population of China, which stands at ~1.4 billion. Microsoft aims to install Windows 10 on “one billion devices by 2018.”

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Technology players are desperate to make presence felt in China

Microsoft’s recently announced JV (joint venture) is similar to IBM’s (IBM) decision to allow China to see and review “an unspecified product’s source code.” IBM refutes the claim that it was the first to succumb to China’s pressure, stating that its peers Microsoft and Apple (AAPL) have also given China permission to look into their software. China is considered one of Apple’s most important markets, which is why Apple struck a deal to allow China’s State Council Information Office to check its software, as reported by Engadget.


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