> the major cost center for PCs is hardware, not software
Microsoft has increased the cost of Windows licences while the cost of hardware components has decreased. The result is that the "free" copy of Windows that comes with pre-built PCs takes an increasing slice of the costs. If a hardware manufacturer can sidestep the OS cost while providing its customers with a functional computer then it gives them a huge competitive advantage.
Sure, but the major cost center for PCs is hardware, not software, at least not the operating system anyway. Major manufacturers are permitted to install Windows on their machines for only a small fraction of the retail price, so installing Linux instead doesn't save much money.
Either way, the main driver for open source isn't price, it's flexibility. Not everyone needs it, but for those who do, it's a huge boon.