Thursday, September 6, 2012

Microsoft Corporation (NASDAQ:MSFT)’s expansion plans in China

In response to Apple’s and Google’s growing presence in China’s vast mobile Internet market, Microsoft has announced plans to hire 1000 more employees and also raise research and development spending by 15 percent.

Around 400 million Chinese surf the Internet with their mobile phones and other devices and competition for gaining larger market share is intense. Although Microsoft is ready with its Windows 8 mobile operating system, it has been lagging behind Apple Inc and Google Inc in the mobile internet space.

Microsoft's CEO for China, Ralph Haupter has said, "We respect that we have two players in the market which have a strong role, and we feel ready to attack and have different offers to basically change the game plan on that one."

According to Ya-Qin Zhang, Microsoft’s Asia Pacific chairman for Research and Development, the company will spend $500 million more than last year and that the research staff currently numbering 3000 will also be expanded by 15 percent.

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China is the world’s most populous online market and global as well as local companies are fighting it out to create a significant presence. Recently, China’s very own Internet search company Baidu Inc, not only launched its own mobile browser but also said that it has plans to build a cloud computing center.
According to the China Internet Network Information Center, in July, there were538 million Internet users In China. The number using wireless devices for browsing form a very significant portion of this, 388 million or 70 percent of the total.

So Microsoft has realized that it needs to take some drastic measures. In addition to hiring more people and investing in Research and development, the Redmond, Washington based company also plans to hire local partners who will help them in developing China specific mobile applications.

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