China Bans Windows 8 As It Develops Its Own Operating System

China Bans Windows 8 As It Develops Its Own Operating System
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China has banned government use of Windows 8, Microsoft Corporation (NASDAQ:MSFT)’s latest incarnation of its operating system, a powerful blow to the company that has had sales difficulty in one of the world’s fastest growing economies.

Move to replace Windows XP stunted

“China’s decision to ban Windows 8 from public procurement hampers Microsoft Corporation (NASDAQ:MSFT)’s push of the OS to replace XP, which makes up 50 percent of China’s desktop market,” said data firm Canalys.

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Microsoft generates more revenue from Netherlands than China

China has long been a troubling market for Microsoft. In 2011, for instance, former chief executive officer Steve Ballmer reportedly told employees in 2011 that Microsoft earned less revenue in China than in the Netherlands, even though computer sales matched those of the US. The reason given was due to computer piracy.  The new Windows 8 operating system is said to have more sophisticated tools that identify and track individual users with one goal to reduce software piracy.

The official Xinhua news agency said the ban was to ensure computer security after Microsoft Corporation (NASDAQ:MSFT) ended support for its Windows XP.  On a separate note, Microsoft has acknowledged it cooperates with the NSA in allowing the US surveillance agency access to its operating system.

China develops its own operating system

After a 13-year-old Microsoft support agreement ended with China in April, the software firm had hoped customers would switch to the new operating system.  People are hesitant to switch due to the expense, inconvenience and lack of clear product benefits to such a switch. The Chinese government is the biggest buyer of computer software in the Asian nation and its purchasing decisions can significantly impact sales.

China has been developing its own Linux-based operating system, known as COS, in association with HTC Corp (TPE:2498), a developer of mobile software applications for smartphones. COS was developed with the goal to cut China’s reliance on any one software vendor and improve user security.  The new operating system is said to be focused on mobile users.

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Mark Melin is an alternative investment practitioner whose specialty is recognizing a trading program’s strategy and mapping it to a market environment and performance driver. He provides analysis of managed futures investment performance and commentary regarding related managed futures market environment. A portfolio and industry consultant, he was an adjunct instructor in managed futures at Northwestern University / Chicago and has written or edited three books, including High Performance Managed Futures (Wiley 2010) and The Chicago Board of Trade’s Handbook of Futures and Options (McGraw-Hill 2008). Mark was director of the managed futures division at Alaron Trading until they were acquired by Peregrine Financial Group in 2009, where he was a registered associated person (National Futures Association NFA ID#: 0348336). Mark has also worked as a Commodity Trading Advisor himself, trading a short volatility options portfolio across the yield curve, and was an independent consultant to various broker dealers and futures exchanges, including OneChicago, the single stock futures exchange, and the Chicago Board of Trade. He is also Editor, Opalesque Futures Intelligence and Editor, Opalesque Futures Strategies. - Contact: Mmelin(at)

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