It is not clear what Microsoft is doing as it can't compete with Android on build cost and market price. Redmond has not told anyone what its cunning plan for Windows RT is yet. The move will mean that cheap Windows RT tablets are unlikely. The cheapest Windows RT tablets to hit the market at around $600, with top-spec models costing about $800-900. This is nearly a third more expensive than the low-end iPad 2 or an Asus Android tablet.
What it will be offering though are full PC tablets. The idea is that a dumb iOS/Android device is OK but you can spend a bit more and get a full PC. If this is the case, it would mean higher margins for those suppliers who sign up to Microsoft’s cunning plan. However it also ignores the fact that all those who have outpriced Apple have failed.