Microsoft has been aggressively trying to persuade MediaTek to push Windows-based tablets in China's white-box market and with the software giant's announcement of offering free Windows licensing to mobile devices sized below 9-inches, sources from the upstream supply chain expect a high chance for the two firms to form partnership. MediaTek and Microsoft did not confirm the rumor yet.

Because of Windows tablets' high prices, most brand vendors have chosen to develop Android-based tablets, but with Microsoft's new licensing policy, brand vendors may reconsider to develop related models, the sources said.

The sources pointed out that Microsoft and Qualcomm are mainly cooperating over Microsoft's Nokia smartphones, which had shipments of 10-20 million units in 2013. However, seeing the Windows platform continues to remain a minor player in the smartphone market, Microsoft is seeking cheaper solutions for its products to boost market share.

It is serious. First results of Microsoft can be already seen in the market of small tablets with full fledged Windows 8.1. If they move Windows Phone and Windows RT to MTK solutions their share can triple in no time.