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Software piracy declines in emerging markets

Washington, D.C. - Reductions in software piracy were reported in several emerging markets, but 35 percent of the packaged software installed on personal computers worldwide in 2005 was illegal, amounting to $34 billion in global losses, according to an annual study released by the Business Software Alliance.

The BSA, an international association of the world's leading software developers, said improvements in a number of markets indicate that education, enforcement, and policy efforts are beginning to reduce the incidence of piracy in China, Russia, and India, and in Central and Eastern Europe and the Middle East & Africa.

Robert Holleyman, president and CEO of the BSA, said progress in emerging markets provides some encouragement, but more needs to be done. "With more than one out of every three copies of PC software obtained illegally, piracy continues to threaten the future of software innovation, resulting in lost jobs and tax revenues," he said.

A previous IDC/BSA study showed that if the global piracy rate were to drop 10 points to 25%, it would create as many as 2.4 million new jobs, $400 billion in economic growth, and $67 billion in tax revenues worldwide.

Planetary pirates
Global losses from software piracy amounted to $34 billion in 2005, an increase of $1.6 billion over the previous year. In countries with very large software markets, comparatively low piracy rates can amount to huge losses.

While the United States had the lowest piracy rate of all countries studied at 21 percent, it also had the greatest losses - $6.9 billion. China saw the second highest losses at $3.9 billion with a piracy rate of 86 percent, followed by France with losses of $3.2 billion and a piracy rate of 47 percent.

Piracy rates decreased moderately in more than half (51) of the 97 countries surveyed in this year's study, and increased in only 19. The global rate was unchanged from 2004 to 2005 as large developed markets like the United States, Western Europe, Japan, and a handful of Asian countries continue to dominate the software market as their combined piracy rate remained flat.

Meanwhile, Russia saw a four point drop in its software piracy rate, and India's piracy rate declined two points. China, with one of the fastest-growing information technology markets in the world, dropped four points between 2004 and 2005.

The study also found that 19 of the 26 countries in the Middle East and Africa declined somewhat, with 12 countries dropping two or more percentage points. In Central and Eastern Europe, the piracy rate declined in 15 of the 18 countries included in this year's study.

The countries with the highest piracy rates were Vietnam (90 percent), Zimbabwe (90 percent), Indonesia (87 percent), China (86 percent), and Pakistan (86 percent).

The countries with the lowest piracy rates were the United States (21 percent), New Zealand (23 percent), Austria (26 percent), and Finland (26 percent).

The study was conducted by IDC, a global market research and forecasting firm. It covers all packaged software that runs on PCs. IDC conducted 5,600 surveys and enlisted IDC analysts in 38 countries to confirm software piracy trends.

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