Until recently, it wasn’t too rare to hear tech experts lament (or praise) the death of the PC. With Apple (NASDAQ:AAPL) pioneer of the smart device concept, seemingly everyone pushed into the touchscreen platform. A notable exception was Microsoft (NASDAQ:MSFT). The house built by Bill Gates decided to marry PC and smart device technology, resulting in the Surface tablet/laptop hybrid.
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While investors who bought MSFT shares likely did so for Microsoft’s myriad of relevant technologies, such as cloud computing and data centers, the company’s strong PC business has always been authoritative. Personally, I’m glad the consumer tech company ignored the doom stories surrounding PCs. In this case, going against the grain was the right move for Microsoft stock investors.
Even better, the management continues to increase the exposure of its CP. At its product event on Wednesday, Microsoft unveiled seven new iterations of the Surface lineup. Primarily, the debut was important because it signaled to MSFT shareholders the viability of the hardware market.
However, it’s also fair to point out that one product clearly stood out from the rest: the Surface Neo.
A radical departure from other PC hardware, the Surface Neo has two separate screens attached by a hinge. Plus, this dual-screen computer isn’t a gimmick because it’s incredibly modular. Want to use the Neo as a laptop? MSFT will include a detachable keyboard that will magnetically attach to a screen. Or, you can use a tablet-like screen.
In my opinion, the Neo is sleek. Hope everything works as advertised. If so, the Neo could be a game-changer for Microsoft stock.
MSFT makes material sexy
CNBC Contributor Todd Haselton calls the Neo “Microsoft’s most important product in years.” One of the main reasons has to do with the dominance of the technology company’s operating system.
As Haselton noted, the Neo will run Windows 10X, a special version of the ubiquitous operating system. It is designed to accommodate the dual screen structure. But the important factor here is that, in Haselton’s words, Windows is the “real moneymaker” for Microsoft stocks. “Remember: Microsoft is not a hardware company. This sells hardware, but it wins when more people use Windows computers, regardless of who builds them,” Haselton wrote.
Additionally, the Neo’s dual screens allow Microsoft to squeeze more usability into a modular physical platform. Right now, the current Surface Pro is just too big and unwieldy to be comfortably used as a portable device. So, for those who value mobility highly, an Apple iPad is superior.
But with the Neo, the consumer has the option to choose. If they prefer a powerful, standalone device with two screens, that’s the main focus of the Neo. Additionally, users can easily fold their device to transport it from meeting to meeting.
Although Microsoft’s more visible technological innovations, such as the cloud, have more sex appeal, the hardware is still relevant. This is one of the underestimated tailwinds for the MSFT stock price. As ZDNet Contributor Steve Ranger noted that 68% of companies say desktops are their employees’ primary computing device.
What is the adoption rate of tablets by companies? A whopping 1%.
If Microsoft can successfully deliver the Neo, it has an opportunity to bolster enterprise laptop adoption rates. About 29% of companies buy laptops for their employees.
And going back to Haselton’s point, these new (beautiful) Surface products are driving demand for Windows.
It also makes the hardware functional
Although I haven’t always applauded AAPL actions, I have long been a fan of Apple products. Not only did they pioneer the concept of the smart device, but they also brought a cohesive and connected ecosystem.
But in recent years, I’ve questioned Apple’s business intelligence. When the iPhone X came out, I was an early adopter. But when one of the decisions that baffles me to this day is why Apple simply didn’t include a headphone jack in its much-hyped flagship at the time.
Instead, Apple is forcing me to buy a dongle. It’s basically a plastic-wrapped skin tag that you pay money to attach to your poor phone.
Fortunately, Microsoft has a much better approach. They’re going to keep the sleekness of their devices while adding more power and functionality.
If they keep innovating their material like this, I might be tempted to switch. I’m sure I’m not the only one thinking like that. Ultimately, this promises good things for MSFT stock in the longer term.
As of this writing, Josh Enomoto does not hold a position in any of the aforementioned titles.
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