Microsoft's newest weapon in China piracy fight

In 20 years in China, Microsoft Corp hasn't had much luck. It is the world's largest market for PCs and yet with piracy rates as high as 77 percent, the software company is seeing only a fraction of the revenue it could collect.

That might change with the launch of its Surface tablet, which goes on sale online in China at the same time as a handful of other countries. The Surface is a rare piece of Microsoft hardware, and will run the company's new Windows 8 operating system.

While both Windows 8 and the Surface are Microsoft's global challenge to assaults by Apple Inc's iPad and tablets running Google Inc's Android operating system, analysts say the company's splash is a sign of its determination to crack the elusive yet vital China market.

"The fact that there is no (release) delay and they are treating China as one of their primary markets reflects how important China is to Microsoft and I think that's evident in how they plan to launch Surface," said Adam Leach, a London-based analyst with technology consulting firm Ovum.

Microsoft chose Shanghai as its first global site for what it called a "pre-launch" of Windows 8 on Tuesday. Speaking to an enthusiastic audience, Windows head Steve Sinofsky began his speech in Mandarin before launching into his sales pitch for Windows 8. The full launch will take place in New York on Thursday.

The tablet will be sold from Friday in China through Suning Appliance Co Ltd's website and retail stores as well as Microsoft's online China store.

Microsoft, the world's biggest software maker, has long struggled to monetise China. Its biggest problem has been piracy. Since opening its first Beijing office in 1992, Microsoft has found it hard to gain traction among Chinese consumers unwilling to pay full price for software.

According to a Business Software Alliance report in May, China had an illegal software market worth nearly $9 billion last year or a piracy rate of 77 percent. A pirated copy of Microsoft Office can be found for as little as $2 -- against an official price of up to 398 yuan.

Microsoft is betting on the Surface to curb piracy in China