For it's price point at $350 and power output, it's hard to make a device that will be able to compete; both consoles have impressive output for their price points.
XO supports keyboards, so, there might be a method to abuse the universal app store and load up Word or something and get typing on a monitor.
And something the GAF members have caught onto and I'm ashamed that I haven't is that Asia is a massive market that is mainly PC. They don't really use consoles there. i.e. look at Korea and China. So if they don't want Xbox that's fine, get them into Xbox Live ecosystem and make money that way.
This post nails it:
http://www.neogaf.com/forum/showpost.php?p=154616455&postcount=509
So far we've seen their plan come to fruition. It does look like going forward it's a cloud based strategy if this leaked document is anything to go by.