Lenovo spends $1.24bn on pre-installed Windows

Lenovo spends $1.24bn on pre-installed Windows

Microsoft will earn $1.24bn this year from sales of the Windows operating system pre-installed on PCs made by Lenovo, the world's third largest PC maker. This includes $150m in China alone, the Chinese company's chairman estimates.

Lenovo chairman Yang Yuanqing made the remarks at a conference on intellectual property rights in Beijing last week and his comments were reported by several Chinese-language news sources.

Yang's comments provide a rare insight into the fees manufacturers pay to sell PCs with Windows, information that Microsoft traditionally keeps under wraps.

Yang stressed the importance of protecting intellectual property to foster the development of China's own software industry. In China, PCs are often sold without an operating system because most Chinese consumers have low incomes and are deterred by the additional cost.

China's PC buyers are easily able to purchase pirated software, including Windows, for a few dollars at street markets throughout the country. However, in December, Lenovo began pre-installing Windows on all the own-brand PCs it sells in China, Yang said.

Lenovo shipped 13.9 million notebook and desktop PCs worldwide in 2005, up 222 per cent from 2004, and increased its market share to 6.4 per cent, Primasia Securities of Taiwan said today, citing data from US-based research firm, iSuppli. Approximately seven million of those computers were sold in China.