TAIPEI — At shops in the bustling Xinyang market in Shanghai, fake Apple iPhones and Bose speakers were displayed alongside bootleg copies of Microsoft’s Windows 7 operating system, a week before it officially was to go on sale.
“Which version do you want? Ultimate? Normal? English or Chinese?” one shopkeeper asked, proudly pointing out her ample supply of discs packed in unmarked white boxes.
People in mainland China have been able to buy pirated copies of the newest version of Microsoft’s Windows franchise this month for just 20 yuan, or $2.93, each — a fraction of list prices, which are as high as $320.
Windows 7’s “early release” in China underscores the challenge major software makers face in trying to make money in China, the world’s second-largest PC market, after the United States.
In Shanghai, China, bootleg copies of Microsoft’s Windows 7 operating system were displayed a week before the official date of sale. People in mainland China have been able to buy copies of the newest version of Microsoft’s Windows franchise for 20 yuan ($2.93) each — less than one percent of list prices, which are $320.

In China, the world’s second largest PC market, about 80 percent of software sold last year was pirated. The biggest issue is the price of software: Microsoft will sell its low-end version of Windows 7 for 15 times as much as is charged for pirated copies.

In a bid to tackle the problem, Microsoft began an unconventional campaign in China last year that caused a black screen to be displayed every hour for users of pirated versions of Windows XP (Windows Genuine Advantage was distributed through automatic updates). However, that caused thousands of irate users to migrate to free software from domestic companies such as Kingsoft.

Some people have said that free web-based software, supported by advertising, may ultimately help to reduce piracy in China by letting third parties pay for development costs.

Another likely competitor of Windows 7 is Mac OS: its sales figures have consistently grown every time a new Windows operating system has launched over the last 10 years.