Update: Microsoft moves to stop software piracy in China

Companies agree to help educate end-users about the benefits of using licensed software

Microsoft will continue its efforts to stop software piracy, signing agreements with two Chinese computer makers to use only licensed versions of its Windows XP operating system.

Microsoft on Thursday announced it has made deals with Tsinghua Tongfang, of Beijing, the third largest computer manufacturer in China, and TCL in Guangdong, China. The agreements were signed at a ceremony in Los Angeles, attended by Chinese Vice Premier Wu Yi, who is in the U.S. for economic and trade talks, Microsoft said in two statements regarding the deals.

Under these "genuine Windows cooperative engagement agreements," the companies will agree to help educate end-users about the benefits of using licensed software instead of pirated versions, said John Litten, communications manager in the OEM (original equipment manufacturer) division of Microsoft in Redmond, Washington, speaking before the official announcements were made.

Those benefits include OS support and the ability to work well with software that Chinese users purchase from other vendors, he said.

The deals are worth millions of dollars in licensing fees. Beginning in June, TCL will preinstall Windows software on all of its PC product lines and will buy Windows licenses worth $60 million for three years, according to a statement from TCL Group Vice President Yang Weiqiang released as part of Microsoft's announcement. The deal with Tongfang is worth $120 million across three years, according to a statement from Rong Yong Lin, that company's chairman.

The contracts are similar to a deal Microsoft signed with Lenovo Group, of Raleigh, North Carolina, in November 2005. Microsoft also plans to sign additional deals with Chinese computer makers in coming months.

"It's an area of the world that's consuming lots of PCs, and we have been working with our OEM partners to improve respect for intellectual property; even the Chinese government has been working on that. We're hoping this will move the Chinese market forward," Litten said.

The announcement of the deals comes as part of an expected bundle of business agreements that will be signed in advance of Chinese President Hu Jintao's April 20 visit to the White House to meet U.S. President George Bush.

Published reports say those deals could be worth $15 billion and include companies like The Boeing Co., Motorola, General Motors, DaimlerChrysler, General Electric, and Flextronics.

(Sumner Lemon in Beijing and Nancy Weil in Boston contributed to this report.)

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