Fri, Sep 07, 2012 - Page 15 News List

Microsoft expanding in China to catch up to rivals

AP, BEIJING

Microsoft Corp will hire more than 1,000 additional employees in China this year and boost research and development spending by 15 percent as it tries to catch up with Apple Inc and Google Inc in the fast-growing mobile Internet market, executives said yesterday.

The announcement adds to intensifying competition in wireless Internet in China, where nearly 400 million people surf the Web using mobile phones and other devices. Microsoft Corp is promoting its Windows 8 mobile operating system, but came late to the market and trails Apple and Google, whose Android system is widely used in China.

“We respect that we have two players in the market which have a strong role, and we feel ready to attack and have different offers to basically change the game plan on that one,” Microsoft’s CEO for China, Ralph Haupter, said at a news conference.

The new employees will be in addition to Microsoft’s workforce of 4,500 in China and will be spread across research and development, marketing and customer service, Haupter said.

Research spending in China will rise by 15 percent over last year’s US$500 million, according to another executive, Zhang Yaqin (張亞勤), who is Microsoft’s Asia-Pacific chairman for research and development. He said the current research staff of 3,000 would be expanded by about 15 percent.

China had 538 million people online at the end of July, up 11 percent from a year earlier, according to the industry group China Internet Network Information Center. The share that uses wireless devices grew twice as fast, rising 22 percent to 388 million, or 70 percent of the total.

Android dominates the Chinese smartphone market, used on 76.7 percent of phones in the second quarter of this year, according to research firm Analysys International. Apple’s iPhone dominates the higher end of the market.

Microsoft plans to recruit more local partners to develop mobile applications specifically for China, Haupter said. He said the company believes it has an advantage in doing that because developers can draw on their experience working on other Microsoft products.

Zhang said Microsoft’s six development centers in China that now spend about 80 percent of their time working on products for global markets will focus more on creating offerings tailored to Chinese customers.

Microsoft also plans to expand its cloud computing business in China, the executives said. Zhang said about 100,000 commercial customers now use its private cloud computing service and a service for use by the public is being developed.

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