Report: Microsoft signs $US1B software deal with Lenovo

Microsoft scores a part of Lenovo's 6.3 percent market share

On the first stop of a Chinese business delegation's U.S. spending spree, Lenovo Group Wednesday penned a deal to buy more than $US1 billion in software from Microsoft.

Although the signing ceremony took place in San Francisco, a Beijing-based spokesman for Lenovo detailed the deal to Reuters and XFN wire service reporters. According to Reuters, Lenovo committed to purchasing Windows XP, Windows Vista, Microsoft Office and other software from Microsoft.

"Our projection is the price tag could be as much as $US1.3 billion for this fiscal year," the spokesman told Reuters.

Altogether, the Chinese delegation committed to buying $US4.3 billion in U.S. technology and signed 27 contracts with Microsoft and other companies, including Cisco Systems, Hewlett-Packard and Oracle.

In April 2006, Lenovo and Microsoft sealed a similar deal for $US1.2 billion that reaffirmed a November 2005 pledge the two companies made in an effort to get legitimate copies of Windows on Chinese PCs. China has long been a counterfeiter's haven, with bogus copies of software -- Windows included -- the rule rather than the exception.

Lenovo, which acquired IBM's personal computer line in 2005, is currently ranked No. 4 behind HP, Dell and Acer in worldwide market share. According to Gartner's most recent data, Lenovo holds 6.3 percent of the market, up from 5.9 percent the same time last year when it still owned the No. 3 spot.

The deals signed yesterday are just part of a multistate swing through the U.S. by 200 Chinese companies. The so-called "buying mission" is a regular event, and only the latest attempt by China to mollify the U.S. Later this month, the U.S. and China will hold government-level talks in Washington about the $US232 billion American trade deficit.

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Gregg Keizer

Gregg Keizer

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