Scaring users off is not that big a problem for them. Microsoft has 5 vital clients - HP, Dell, Acer, Lenovo and Toshiba. As long as you buy a computer with Windows installed (and it's hard not to) they're happy.
Yes, but those clients are expanding their non-Windows offerings. The version of Windows in question isn't for traditional PCs but for ARM tablets. There, it has to compete with Android[1], which has a bit of a head start.
[1] And iOS, when in comes to consumer market share, but that's obviously not an option for the manufacturers MS sells to.
> There, it has to compete with Android[1], which has a bit of a head start.
This matters little if MS is able to leverage their power with PC (by modulating the Windows OEM license price) and phone (modulating their Android patent tax) makers to convince them they should build Win8 tablets. Even as it diminishes, the power Microsoft has over the computing industry is enormous and cannot be ignored.
I have a strong suspicion many phone vendors wouldn't bother to offer WP7 products without some sort of incentive from Redmond.
