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Microsoft Seeks Hardware Revenue in Piracy Markets

Microsoft sees potential to sell computer keyboards, mice and other hardware in emerging markets where software sales are hampered by widespread piracy.

Microsoft Corp. sees potential to sell computer keyboards, mice and other hardware in emerging markets where software sales are hampered by widespread piracy, a sales executive said Wednesday.

Microsoft has struggled to make money in countries such as China and Russia where piracy of its flagship Windows operating system and Office business software remains rampant.

Microsoft Vice President Mitch Koch conceded that hardware sales are only a small part of Microsoft's overall revenues, which are dominated by Windows and Office sales, and that hardware doesn't have the high profit margins of established software.

But Koch, who is in charge of Microsoft's worldwide entertainment and devices retail sales, said the company's keyboards, mice and other computer peripherals are profitable, although it continues to lose money on its Xbox 360 videogame consoles.

In July, Microsoft warned that its latest foray into hardware, the Zune media player that will be built by Toshiba Corp. to compete against Apple Computer Inc.'s iPod, will not be immediately profitable.

At a conference for journalists on its Redmond campus, Microsoft unveiled several new devices, including a wireless keyboard designed to tie in with the forthcoming Windows Vista operating system.

Another gadget, the Wireless Notebook Presenter Mouse 8000, is a four-in-one device that can be used as a mouse, a slide presenter, a laser pointer and a media remote. It comes out next month and will cost $99.95.