Of all the markets in the world where Microsoft is having trouble, its issues in China are the most serious.
China has the second largest economy in the world, but Microsoft generates more revenue from the Netherlands than China. Windows Phone has a negligible and dropping market share there, and Windows 8 has just been banned by the Chinese government.
It seems Microsoft is not taking the challenge lying down however.
Microsoft is creating a new Operations System Group Engineering division based in Beijing in China where they hope to adapt Windows and Windows Phone to make it more appealing to the local market.
They plan to create China-market specific Windows features and products across different form factors, which includes new Windows Shell experiences for the Chinese market, personalized device experiences and Cortana integration.
The team will be working closely with the Windows team in Redmond and will likely deliver on Windows Phone first.
Microsoft will also work with trusted Chinese ODMs to design and manufacture devices at scale.
If Microsoft fails in China there is a strong possibility there will be billions of people who live their lives without any engagement with Microsoft, which does not bode well for the company.
Is Microsoft right in focussing so closely on China, and may it already be too late? Let us know below.