They are not looking to make margins on the OS or the hardware. They want adoption and distribution. The money will be made later on extracting value from the ecosystem they are trying to build. Whether that is with a higher end product later on, monetising the OS/ecosystem later on with ads or app fees is not relevant at Thai stage. What they are trying to do is to build a new ecosystem that they are entrenched and that they control firmly. They are trying to build the android of VR to put it simply