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Microsoft's Boldest Product in Years Might Not Come This Year After All

By Evan Niu, CFA - Apr 10, 2020 at 11:00AM

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The software giant is reportedly running into development challenges with Windows 10X.

Late last year at Microsoft's (MSFT -0.26%) annual fall product event, the enterprise-software juggernaut teased two new product prototypes that were scheduled to ship in late 2020: the Surface Neo and Surface Duo. The devices have similar form factors, each featuring a folding design with two displays. The Duo is an Android phone -- Microsoft would prefer that you don't call it a phone -- while the Neo is essentially a foldable tablet that runs Windows 10X, a specialized version of Microsoft's flagship operating system.

That bold vision for the future of computing is now reportedly getting delayed due to the coronavirus outbreak.

Person using Surface Neo

Microsoft Surface Neo. Image source: Microsoft.

Software is hard

ZDNet reports that Microsoft is delaying the Neo, which won't be ready to ship by the 2020 holiday season as originally planned. The delay was also corroborated by CNBC. The issue doesn't appear to be related to hardware constraints or supply chain disruptions, as much of the consumer electronics supply chain is being resurrected in China as the country has seemingly overcome the coronavirus.

Instead, development of Windows 10X is running into hurdles. The variant is designed to enable dual-screen PCs, but Chief Product Officer Panos Panay reportedly sent an internal memo that Windows 10X won't be ready to ship this year. As a result, Microsoft's engineering teams are now focusing on getting the operating system to work on single-screen devices first, according to ZDNet. That would include hybrids and convertible form factors, as well as regular clamshell laptops.

That also means that third-party dual-screen devices won't be seeing the light of day in 2020, either. Microsoft had previously said that third-party manufacturers like ASUS, Dell, HP, and Lenovo were onboard to release dual-screen Windows 10X products by this fall.

The Duo's timeline doesn't appear to be affected quite yet, which would make sense since the smartphone will run on Android instead of Windows 10X. A few months back, Microsoft released developer tools for the Duo. The tech giant's re-entry into the smartphone market might still be on track.

Microsoft had warned in February that its personal computing segment would fall short of guidance due to the impacts of COVID-19, as the supply chain was taking longer than expected to return to normal.

A dual-screen future

Windows 10X lays out Microsoft's direction for where it thinks computing should go in the years ahead, and comes just as longtime rival Apple (AAPL -0.14%) is embracing hybrid form factors like never before. In one of its biggest changes to the iPad to date, the Mac maker recently added cursor (trackpad and mouse) support to iPadOS. The forthcoming Magic Keyboard for iPad is among Apple's most aggressive moves to position its tablet as a true laptop replacement.

If Windows 10X dual-screen devices eventually prove to be commercially successful in a few years, will Apple follow in Microsoft's footsteps once again?

Teresa Kersten, an employee of LinkedIn, a Microsoft subsidiary, is a member of The Motley Fool's board of directors. Evan Niu, CFA owns shares of Apple. The Motley Fool owns shares of and recommends Apple and Microsoft and recommends the following options: long January 2021 $85 calls on Microsoft and short January 2021 $115 calls on Microsoft. The Motley Fool has a disclosure policy.

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