Microsoft Corporation (MSFT) Stepping Up R&D Efforts in China

Microsoft Corporation (NASDAQ:MSFT) is appaently now interested in getting in the game with Apple Inc. (NASDAQ:AAPL) and Google Inc. (NASDAQ:GOOG) in an emerging market like China, announcing Monday that it was stepping up its research and development efforts in that country, starting with a significant hiring project.

Microsoft Corporation (NASDAQ:MSFT) announced plans to hire 1,000 more workers in China, spread primarily among its R&D, marketing and customer service areas, but it also staffing a large cloud-computing center in Shanghai with about 600 people, the company said. The hiring is expected to help enhance the R&D work of Microsoft Corporation (NASDAQ:MSFT) in the area of the mobile Internet in China. According to a report from the China Internet Network Information Center, the country had about 540 million online shoppers by the end of July, up 11 percent from the prior year. But more importantly for Microsoft Corporation (NASDAQ:MSFT), Apple Inc. (NASDAQ:AAPL) and Google Inc. (NASDAQ:GOOG), the number of those shoppers who used mobile devices (smartphones, tablets) was about 390 million (up 22 percent from a year ago) – or about 72 percent of the online-shopping market.

Microsoft Corporation (NASDAQ:MSFT) has invested about $500 million a year in R&D in China, and is expected to increase that to $575 million in the coming year (15 percent increase) in order to establish some market share with the launch of Windows 8, Windows 8 Phone and (soon) Office 2013, while Apple Inc. (NASDAQ:AAPL) and Google Inc. (NASDAQ:GOOG) have already established strong market share in China with their iOS and Android operating systems and their newer devices. As with most things in mobile, Microsoft Corporation (NASDAQ:MSFT) has some catching up to do and not much time to do it. How successful this will be will take months to figure out, but to show an increase in R&D investment in the country shows the company at least has improved its interest in the emerging market and is willing to make the effort to be viable in mobile.

This investment could be seen positively by investors in Microsoft, like hedge-fund manager Seth Klarman of Baupost Group, who had $214 million invested at the end of June.