And yet, they can afford the hardware, which costs a minimum 5x as much as the software. It's not that they can't afford it. They choose not to. It's easy en

And yet, they can afford the hardware, which costs a minimum 5x as much as the software. It's not that they can't afford it. They choose not to. It's easy enough to obtain pirated copies of Windows in China. It's harder in countries with developed business environments and legal systems. The salary argument doesn't work, either. Chinese PC penetration is something like 15%, so you really need to look at the average salary of the top 20% when considering affordability, not the country as a whole. It's better to look at this as your usual supply / demand curve. If the price of the hardware and software combination were $100 higher (about the cost of Windows 7 Home Premium in China), then fewer people would buy PC's, but Microsoft would make a ton more across all PC sales. I believe the lost revenue argument, but it's not 100% and it certainly isn't 0. EDIT: Missed a 'the'.