If you thought personal computers and laptops were a dying breed, ceding to the advent of tablets and even smartphones, well… it may be time to rethink that notion. Microsoft Corporation (NASDAQ:MSFT) just unveiled its Surface Book 2, combining all the power of a desktop with all the flexibility of a tablet. And here’s the part MSFT stock investors will like — the new Surface Book 2 outperforms (on paper anyway) anything Apple Inc. (NASDAQ:AAPL) currently has in its lineup.
A game-changer for the value of Microsoft stock? No, that might be an extreme assessment. Microsoft is still putting more and more focus on things like cloud computing and even artificial intelligence; the company’s earnings and any dividend the company pays out will mostly be driven by those businesses. To the extent hardware does still matter to the company, though, the newest iteration of the Surface Books sends a loud message that Microsoft’s still able to turn heads in the hardware market when it really wants to.
Attention-Getting Duality
The new Surface Book 2 is a tablet, and it’s a laptop. The screen is detachable and can be used like a traditional tablet, but it attaches to a keyboard to function like a traditional laptop.
It’s not a new idea. Indeed, Microsoft has made a few of these 2-in-1 solutions in the recent past, as have other manufacturers. Most of those efforts, however, forced owners to accept less-than-thrilling compromises. Tablets are handy, but generally lack the computing power for demanding uses. Laptops, most with better CPUs, can handle more of a workload, but battery life can be limited and they’re anything buy handy to haul around. The Surface Book 2 offers the best of both words — flexibility and capability.
The centerpiece of the new Surface is a quad-core i7 processor, made by Intel Corporation (NASDAQ:INTC). It’s the same processor found in newly manufactured desktops built for the most demanding of applications. There’s plenty of RAM, too, with 8 GB and 16 GB options available. That’s also on par with high-performance desktops and traditional laptops currently being made and marketed.
Perhaps the biggest “breakaway” feature of all, however, as the on-board graphical processing unit.
Rather than a solution that’s integrated into the motherboard, as is the case with most laptops and tablets, the Surface Book 2’s graphics are handled by a discrete GPU from NVIDIA Corporation (NASDAQ:NVDA), with up to 6GB worth of video-managing capacity. That’s more graphics power than many desktops offer, and better than the vast majority of laptops. Ergo, the device is more than able to handle augmented reality and virtual reality demands with ease.
That is a game-changer.
Paying for Power
Buyers will be paying dearly for that computing power, mind you. The lower-end versions of the Surface 2 will go for $1,500, but for all the bells and whistles prepare to shell out $3,300. In that the device can do the job of a laptop and a desktop and a tablet though, enough consumers may view the machine as in investment more than an expense.
To that end, Microsoft acknowledges the newest Surface is more for creators than consumers; creators can justify spending that kind of money for professional, top-of-the-line tools. Time and scale are certainly apt to massage the best of the Surface Book 2 into something eventually priced at more consumer-friendly levels, however, providing the best of both computing worlds — mobility and capability — to the casual user.
What’s it Mean for MSFT Stock?
Owners of MSFT stock — potential or current — may not notice a significant bump in the next earnings report that’s specifically attributable to the Surface Book 2. Microsoft’s Azure cloud computing platform is the current growth-initiative poster child. That’s okay, though. The new laptop/tablet hybrid is still there, and still serves as a sampling of what Microsoft can do.
And that’s perhaps the most exciting aspect of all.
To be sure, Microsoft’s home-grown smartphone ambitions were a flop, so much so that the company unofficially yielded the smartphone OS market to Apple and Alphabet Inc (NASDAQ:GOOGL), which of course makes the popular Android operating system. Microsoft’s Windows is still the world’s best-selling operating system for computers and laptops, but the real growth was in the mobile market. That’s where Microsoft needed to make a dent. It just didn’t.
With the advent of the all-in-one solution, though, that doesn’t require a compromise in any way (even if it’s a bit pricey), Microsoft at least rekindles some of its lost credibility while at the same time demonstrating it’s still capable of creating a little magic when it comes to devices.
That sets the stage for some serious marketing firepower in the future.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities. You can follow him on Twitter.
