Even if using Android costs manufacturers the same as using WP7, why would they use it over Android, when Android is a very proven product in the market, while WP7 is not at all and it sits around 1% market share right now, and dropping.
Does Microsoft think this will make consumers more likely to buy their phones? I think they are much more likely to get a lot of bad PR over this, because there are a lot of Android users and only a few WP7 users. This bad PR will focus negatively on their future products, like Windows 8. They are creating a negative halo effect around their products.