Microsoft cuts prices in China to fight piracy

Lowering prices to combat piracy? Who'da thunk it?

Actually, a few companies have put two and two together and realized that, especially when dealing with China, the best way to get a slice of pie is to price yourself like you belong in the kitchen. Warner impressed us last year when they slashed the prices on their home video products in China, reducing the costs by more than 50 percent. Fox followed suit. Not only does the practice make legit goods more affordable, but it eats into the profits of those selling pirated software by forcing them to realign their own "offerings."

Microsoft's price cuts in China are quite sizable, percentage-wise. Full versions of Vista Home Basic have been cut to 499 yuan ($66), down 67 percent from 1,521 yuan ($200). Vista Home Premium was cut 60 percent, to 899 yuan ($118) from 1,802 yuan ($238). Curiously, the cuts mean that the gap between Home Basic and Home Premium has widened from 281 yuan to 400 yuan ($52).

On the upper end of the Vista product family, the cuts were smaller. Business Edition was cut to 1,880 yuan ($248) from 2,118 yuan ($279), while Vista Ultimate was trimmed from 2,831 yuan ($374) to 2,460 yuan ($325), a reduction of only 13 percent.