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Lenovo & Microsoft sign $1bn software deal

Windows XP, Vista & Office partnership agreed

On the first stop of a Chinese business delegation's US spending spree, Lenovo has penned a deal to buy more than $1bn 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 $1.3bn for this fiscal year," the spokesman told Reuters.

Altogether, the Chinese delegation committed to buying $4.3bn in US technology and signed 27 contracts with Microsoft and other companies, including Cisco, HP and Oracle.

In April 2006, Lenovo and Microsoft sealed a similar deal for $1.2bn 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 PC 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 multi-state swing through the US by 200 Chinese companies. The so-called "buying mission" is a regular event, and only the latest attempt by China to mollify the US. Later this month, the US and China will hold government-level talks in Washington about the $232bn American trade deficit.


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