@RobGreenly:

To look at it another way, if customer X looks at a tablet.. one from Samsung (assume Windows) and one from Microsoft, Microsoft gets $Y license fee where Y > 0 when the customer buys Samsung, but gets $0 when the customer buys it from Microsoft. So Microsoft loses a licensing fee when someone buys a Microsoft tablet. That's lost revenue. That's not good, is it?

This (perfectly) balances out the fact that Microsoft doesn't pay Microsoft for licensing Windows, because Microsoft is not paying Microsoft therefore Microsoft is not making Microsoft licensing revenue. If Microsoft paid Microsoft $100 per license, then Microsoft would make Microsoft licensing revenue at the expense of having to pay Microsoft for the right to license software from Microsoft.

Get it?