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May 15, 2007

Software Piracy Hits $40B Worldwide, Study Says

Efforts to curb software piracy in China are bearing fruit although the piracy rate remains high, costing vendors billions of dollars in lost revenue.

Source: PC World
Written by John Blau, IDG News Service

Efforts to curb software piracy in China are bearing fruit although the piracy rate remains high, costing vendors billions of dollars in lost revenue, according to a survey paid for by large vendors, including Apple Inc. and Microsoft Corp.

That was one of several findings of a report published Tuesday by the Business Software Alliance (BSA) in collaboration with IDC.

Industry observers generally agree that piracy rates are high, though some question the assumptions behind the BSA’s and IDC’s methodology.

The study is based on various data, including the number of new PC shipments, the installed base of PCs and software licenses, as well as estimates of the number of software applications installed on PCs. Open source, which is included, is handled as paid software.

“We know, for instance, that new PCs going to consumers in the U.S. generally have eight pieces of software, four of which are free like Adobe Reader and the other four should be paid for,” said John Gatz, chief research officer at IDC. “So if you know how many pieces of hardware have software and how many pieces of software were paid for, the difference is the pirate.”

China’s piracy rate dipped four percentage points for the second consecutive year and a total of 10 percentage points in the last three years — from 92 percent in 2003 to 82 percent 2006. Revenue lost through piracy over the three-year period is estimated at US$864 million.

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