The fact that you can buy Windows laptops for $150 to $199 surely ought to make you realize the absurdity of that claim.
Even when Windows was at its marketing peak in the late 1990s, the largest OEMs were only paying $40-$45 for a pre-installed copy of Windows. Some were probably paying less (IBM complained to the US government when Microsoft increased its price from $9 to $27).
The low cost version of Windows XP for netbooks cost $11 to $15, and Windows 8 with Bing went for $0* on systems with 8-inch or smaller screens.
I don't know where you think you got your $120 from, but that number wouldn't have figured even in Ballmer's wildest dreams.
* It cost $10 with a $10 refund for setting Bing as the default search engine.
For me its less the money and more the performance. Windows eats processing power that I don't want to expend on a small processor. Sadly, battery performance on new hardware is often worse on Linux, so its a tradeoff.
I have seen quite a few laptops online where getting Linux pre-installed is actually more expensive than getting Windows. You can get them without OS, but then good luck getting everything to work.
That's because it's more expensive for a Windows OEM to pre-install and ship Linux than it is to install Windows.
You have extra hardware qualification and software testing costs, extra accounting, distribution and advertising costs, and massively higher support costs.
Not only does it cost more to pre-install Linux, you lose all the payments for distributing third-part software (ie installing crapware) in Windows, which in some cases means you can install Windows at a profit. (If a user signs up for the pre-installed anti-virus, the PC manufacturer can make more than the cost of Windows.)
That's because OEMs have to pay Microsoft for all devices sold, not all devices with Windows pre-installed. They get a better per device deal that way, but it also makes sure the version without Windows is not cheaper.
