January 15, 2002, 1:31 PM — A spokeswoman for Adobe Systems Inc. said Monday that the company remains committed to developing Chinese-language versions of its products, despite comments reportedly made by its chief executive officer last week that Adobe could abandon the market because of software piracy in the region.
Adobe Chief Executive Officer Bruce Chizen told a Chinese newspaper that the company might exit the Chinese-language software market unless the region could better crack down on software piracy. About 94 percent of the software used in China in 2000 was illegally copied, according to the Business Software Association (BSA), an industry trade group that tracks such data.
Downplaying Chizen's comments, an Adobe spokeswoman in the U.S. Monday said that Adobe has been encouraged by recent steps to curb software piracy in Asia, and has no plans to discontinue localized software products.
"We remain committed to the Chinese market and to developing Chinese-language versions of our products," said Adobe spokeswoman Autumn Blatchford. "We believe there is tremendous potential in this market. Unfortunately, the piracy rate in China is high which makes it difficult for software companies to make a fair return on their investment."
Quoted in the Friday edition of the South China Morning Post while speaking at the Macworld Expo in San Francisco, Chizen said that stopping production of Chinese-language products "is a simple business decision."
"It costs (US)$750,000 to localize an application for the Chinese language and if we are only going to make $500,000 in revenue it does not make sense for us to go ahead," he told the Post. "Until the Chinese government and its citizens realize they are hurting themselves (by using illegally copied software) it is hard for us to make an investment."
According to the head of the BSA office in Hong Kong, software piracy in Asia could hurt software development as software companies face a lack of return on their investments. Local software developers would be most affected since they typically lack the funds that multinational companies have, said Ringo Wong, chairman of the BSA in Hong Kong.
Users will suffer as well, Wong said."End users in China will eventually lag behind the rest of the world without localized versions of the latest software offerings," he said.
However, despite high piracy rates, and the industry's pessimism towards the future development of localized software, China may not be a market that Adobe, or other software makers, can afford to forego.
"Most of Asia has a software piracy problem, but that doesn't stop it from being a very viable market," said Wilvin Chee, Hong Kong-based software research manager at International Data Corp. "If any one software maker stops localizing their software, it will only make their competitors too happy."
According to Chee, localized software is essential to tap into the Chinese software market, which is expected to grow at a compound annual rate of 38 percent over the next five years, with total software revenue growing to US$6.5 billion [B] in 2005 from about US$1.3 billion in 2000.
Currently, Adobe sells a number of products localized in traditional Chinese for customers in Hong Kong and Taiwan, as well as simplified Chinese for customers in mainland China. Its publishing software Photoshop, Illustrator and Pagemaker account for a large portion of its business in the region, the company said.
