Microsoft Corporation (NASDAQ:MSFT) CEO Satya Nadella recently hinted that the company is working on an “ultimate mobile device” during a visit to Australia. The words from Nadella are the strongest proof yet that Microsoft is working on its own smartphone. Up until then, MSFT stock holders and Microsoft tech junkies have only been dealt a series of rumors.

However, contrary to popular belief, Microsoft is not planning to fight Alphabet Inc (NASDAQ:GOOG, NASDAQ:GOOGL) for market share. In essence, investors should do away with any thoughts, or dreams of a Microsoft-controlled smartphone market.

Here is one big takeaway from Mr. Nadella’s interview with the Australian Financial Review:

“Therefore [with Nokia assets], we stopped doing things that were me-too and started doing things, even if they are today very sub-scale, to be very focused on a specific set of customers who need a specific set of capabilities that are differentiated and that we can do a good job of.”

Translation: The Surface Phone, or whatever it’ll be called, will be disruptive. And it will mostly be targeted at professionals and the enterprise community, where is can help improve productivity. Hence, the reason I said it won’t be MSFT vs. GOOGL in the mobile market, or even Samsung (OTCMKTS:SSNLF).

However, the comments so far lead me to believe the Surface Phone will be pretty disruptive. In fact, I think this will end up becoming Surface Phone versus iPhone, renewing the once great Microsoft-Apple Inc. (NASDAQ:AAPL) rivalry.

So the question is, should MSFT stock investors expect iPhone-level kinds of sales?

Microsoft Will Score Low-Volume But Premium Sales

It would be the stretch of all stretches to think Microsoft — or any company — could achieve what Apple has achieved, but it doesn’t mean the Surface Phone can’t be a significant driver to MSFT stock in one way or another.

Apple sold more than 211 million units of the iPhone in fiscal 2016 alone. Microsoft won’t do that in Surface Phone’s first year. But … the iPhone only sold 11.63 million units in its first full year in the market (2008).

Granted, the smartphone revolution had just begun, but the point is that low sales volume in the first year should be expected, not viewed as a failure.

Moreover, with Nadella hinting that the Surface Phone won’t be a “me-too” device, and that it’ll be targeted at some specific set of customers, there are chances the Surface Phone might end up not being applicable for everyone, even though it’d be a high-end device. (Knowing Microsoft, the word “enterprise” should already be coursing through your brain.)

However, it’s likely that price will make up for volume to some extent.

If the phone will be targeted at a group of consumers, that group should be willing to pay a premium to have the device.

So yes, the Surface Phone could be a multibillion-dollar device. But no, it probably won’t generate the same kinds of revenues for MSFT that the iPhone has piled up for AAPL.

Bottom Line on MSFT Stock

As with most stories you’d read about the Surface Phone, this is all about making educated deductions from the information made available.

I repeat for all of us: Microsoft hasn’t made any announcement about any phone. This is all just conjecture.

On a general basis, though, even without a Surface Phone, I believe MSFT stock is a buy based on the newfound management’s appetite to take risk. Nadella mentioned this in his interview with the AFR. And it’s already yielding results in form of stellar products like the Surface group of devices and the HoloLens.

It’s likely that this approach, with Microsoft’s talented team, will continue to yield results.

As of this writing, Craig Adeyanju did not hold a position in any of the aforementioned securities.