Big Surprise At Microsoft's 2019 Surface Event

Microsoft’s (NASDAQ:MSFT) productivity-focused Surface hardware hasn’t been taking huge market share, so it isn’t the kind of thing that’s made a lot of headlines. The business has grown, however, and currently generates over $5 billion in revenue. So it does appear that management knows what they’re doing with this group.

In that context, the company’s two new products, to be launched in time for the 2020 holiday season, probably need to be taken seriously. As CEO Satya Nadella says, “The operating system is no longer the most important layer for us.” Instead, “what is most important for us is the app model and the experience. How people are going to write apps for Duo and Neo will have a lot more to do with each other than just writing a Windows app or an Android app, because it’s going to be about the Microsoft graph.”

These two new products supposedly comprise a new product category, not tablets, not laptops, not phones and not foldables. But they’ll have two screens, to facilitate multi-tasking (the company’s experience with the way people use its technology probably shows just how much multi-tasking people normally do).

And while the smaller one (Duo) will run Android, make and receive calls and fit in your pocket, the larger one (Neo), will run on Windows 10X, a dual-screen optimized version of its OS. The screens can fold all the way back to touch each other and you can also magnetically mount a keyboard onto the front or back if you want to use it. Or put it aside to just use one of the screens as a touchscreen.

The whole idea was to give as little detail as possible to the competition about the specs, camera, price, etc, which along with the long time before launch leads me to think that this is Microsoft’s way of sending out feelers to its customer base and developer community. The designs will likely be finalized after some chitchat with the groups involved, so the chances of their failure are minimized.

Microsoft has reason to be concerned about that because of the miserable failure of its attempts at a Windows Phone. So this time, it’s showcasing all the functions of a phone plus more, while calling the 5 by 8 something-inch device a “Surface.” Obviously, people will make the connection and call it a Surface phone. Even if Microsoft keeps harping on the “plus more” part that links it to its Surface lineup.

But Microsoft didn’t just announce things for next year. It also said that there’ll be some laptops and earbuds for this holiday season. So stay tuned.

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Microsoft shares carry a Zacks Rank #2 (Buy). Other attractive picks in the computer software industry include Rosetta Stone (NYSE:RST) , Sapiens International Corporation N.V. (NASDAQ:SPNS) , ServiceSource International, Inc. (NASDAQ:SREV) and Synopsys, Inc (NASDAQ:SNPS) . Also seethe complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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