The commercial Linux market in China has seen sales value increase 22.6 per cent over the past year, according to new research.

However, the market remains small in revenue terms, with sales of just $5.42m in the first three months of 2008, China-based CCID Consulting reported.

"Servers are still the major application for the Linux market," CCID analysts noted in a recent report.

"The depth and width of application network servers, high performance computing servers and database servers keeps expanding. Linux has acquired more approval from government, finance, telecoms and post services."

As manufacturers broaden their distribution channels, Linux is expanding out of its traditional markets around major cities such as Beijing and Shanghai.

The open source operating system is now seeing more uptake in second- and third-tier cities and in poorer regions such as western China, according to CCID.

Linux is also more commonly found preloaded on desktop PCs than in the past. Pressure from Microsoft and US copyright lobbyists has driven major vendors, such as Lenovo, to include Windows with all PCs sold in China.

However, smaller vendors are selling PCs with Linux preinstalled to cut total system costs, as a Windows licence may add tens of dollars to the price.

With wide access to pirated copies of Windows in China, it is quite common for buyers and staff at small computer stores to replace Linux with a pirated copy of Windows when these PCs are sold.

CCID also said that it is seeing strong growth in the market for customised and mobile versions of Linux in China.