Apple buys a lot of components from Samsung. There is literally no reason whatsoever that would cause Samsung to be unable to undercut Apple in prices.
then how can Samsung sell their tablets at a "competitive" prices as Apple, given that they have to pay Microsoft $99 for the OS.
Please provide evidence that the "OS" will cost $99. As of today, most OEMs pay between $30 and $50 for a copy of Windows, and I don't see that going up anytime soon.
All this race to the bottom will drive the Samsungs out of the market, leaving only Microsoft as the monopoly hardware maker.
In a monopoly, consumers lose.
As blowdart already mentioned, that's not always true.