Microsoft’s move earlier this year to slash the price it charges PC makers for copies of Windows is starting to pay off. Hewlett-Packard has introduced a sub-$200 laptop that runs Windows 8, and a Win8 tablet that will sell for just $99.

The HP Stream 11.6-inch laptop starts at $199.99. As would be expected, there’s not much horsepower under the hood. It’s powered by a budget Intel Celeron processor, and offers just 32GB of eMMC flash memory.

But the device comes bundled with a slew of free online services—like Office 365 Personal and 1TB of OneDrive storage for one year—that show that Microsoft is clearly going for consumers who might be weighing the purchase of a Google-powered Chromebook.

“Today’s consumers demand mobile products that fit their personal style and allow them to work and play whereever they are,” said Mike Nash, vp for HP’s Consumer Personal Systems unit, in a statement.

A 13.3-inch version of the Stream will sell for $229.99.

HP also introduced a pair of low-cost Windows 8 tablets. The 7-inch HP Stream 7 will sell for $99, while its 8-inch cousin, the HP Stream 8, is priced at $149.99. The Stream laptops and tablets are set to hit stores and online outlets in November, according to Microsoft.

Until earlier this year, it would have been virtually impossible for HP or any other hardware maker to sell Windows-based devices at such a low price and still make a profit. Microsoft typically charged anywhere from $50 to $100 per license, but Redmond in February cut so-called OEM licenses by as much as 70 percent for systems that retail for less than $250, according to a report by Bloomberg, which cited anonymous sources.

The report also said that budget Windows PCs and laptops also will not have to undergo logo certification, a time-consuming and costly process under which Microsoft verifies that each piece of new hardware is fully compatible with Windows.

The changes are seen as an acknowledgement by CEO Satya Nadella, who succeeded former Microsoft chief executive Steve Ballmer in February, that the company can no longer charge manufacturers a premium for Windows when rival Google gives hardware makers access to its Android and Chrome operating systems for free.

Microsoft’s hope is that, by getting Windows devices into the hands of more consumers, it can drive adoption of services like Bing and Xbox, from which it derives fees and advertising revenue.

The budget devices should also help HP fend off competition from rival hardware makers like Samsung.