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Wed, May 24, 2006 - Page 10 News List

Pirated software cost companies US$34bn last year

AP , WASHINGTON

Makers of computer software report that piracy rates, while still high, declined slightly in both China and Russia last year, but that global losses from the use of illegal computer software rose to US$34 billion.

The Business Software Alliance said in a new report that 35 percent of the packaged software installed on personal computers worldwide last year was illegal, the same percentage of pirated software found in 2004.

However, the group said losses from that illegal software rose to US$34 billion, an increase of US$1.6 billion from 2004, reflecting an expanding level of sales around the world. The new report was released yesterday.

The four countries with the biggest percentage declines in piracy were China, where 86 percent of all software sold is pirated, down 4 percentage points from the 90 percent of 2004; Russia, down 4 percentage points to a piracy rate of 83 percent; Ukraine, down 6 percentage points to a piracy rate of 85 percent, and Morocco, down 4 percentage points to a piracy rate of 68 percent.

By contrast, the US had the lowest piracy rate in the world last year at 21 percent. However, that amounted to US$6.9 billion in losses to software manufacturers, the highest of any country because the US market for computer software is so large.

The lost sales in China totaled US$3.9 billion, putting it in second place in dollar losses followed by France with losses put at US$3.2 billion and a 47 percent piracy rate.

The data in the group's third annual report was assembled by IDC, a leading global market research firm for the information technology industry.

The report found that piracy rates fell in 51 of the 97 countries surveyed while increasing in 19.

The fact that the global rate for piracy was unchanged at 35 percent was attributed to the dominance in software sales in the US, Western Europe and Japan, countries where piracy rates remained virtually the same.

"The progress made in reducing PC software piracy in several emerging market countries provides some encouragement, however much more needs to be done," said Robert Holleyman, president of the Business Software Alliance.

Holleyman said the fact that one out of every three copies of PC software were obtained illegally last year represented a huge drain on the industry.

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