Senior executives from Lenovo Group Ltd. and Microsoft Corp. met today to reaffirm their joint efforts for market development and to formally sign a global agreement that expands and deepens the strategic cooperation between the two companies.
The two companies will work together to promote the use and benefits of validly licensed Microsoft® software products through new and innovative joint sales, marketing and training programs in China and around the world.
In November 2005, Lenovo took the initiative to launch a value-added software program in China, becoming the first PC manufacturer to pre-install genuine Microsoft Windows® operating systems in all its product lines for the China market.
Lenovo intends to pre-install genuine Microsoft software on PCs manufactured by Lenovo that are sold in more than 65 countries and regions around the world, allowing customers to enjoy the Windows capabilities they expect, and take advantage of ongoing system improvements that let them do more with their PCs. By promoting the consumer benefits of genuine software, Lenovo expects to purchase Microsoft Windows software valued at approximately $1.2 billion (U.S.) over the next 12 months.
Some relevant factoids from the AP:
In an interview Monday with The Associated Press …, Lenovo Chairman Yang Yuanquing said 70 percent of the computers Lenovo sells in China are now loaded with licensed Windows copies, up from 10 percent six months ago.
Lenovo expects to buy $1.2 billion worth of Microsoft software in the next 12 months, including about $200 million for the Chinese market.
So while there are more Lenovo factory installs for the Chinese market, the bulk of the bucks are for other geographies and certainly include the business-as-usual Microsoft installs for the IBM PC business which Lenovo acquired last year. The net is don’t automatically add $1.2B to the Microsoft gross.
Update: At John Dvorak’s blog, Eideard notices a Shanghai Daily article which indicates that Lenovo is paying Microsoft $37 per copy of Windows. That doesn’t seem out of line with the very rough estimate I made the other day for Founder, another Chinese OEM. As always it depends on the version mix and how many PCs will have Windows instead of an alternative.