What Microsoft Didn't Show Us Last Week Could be Huge

By Markets Fool.com

The Microsoft Windows 10 event was all about software. With the exception of its HoloLens -- a prototype product with no firm release date -- Microsoft did not show a single piece of new hardware on Wednesday.

Continue Reading Below

That would not have been much of a surprise in years past, but Microsoft is increasingly a hardware company. Last quarter, for example, the company sold 10.5 million smartphones, 6.6 million game consoles, and around 1 million Surface tablets.

The lack of hardware defied a report from The Information, whose track record has been fairly solid. Allegedly, Microsoft had been slated to unveil a phone-laptop hybrid -- a device that would've uniquely capitalized on the hybrid nature of Windows 10.

That product could still be forthcoming -- Microsoft did admit that it had new, flagship phones in the works -- and if it materializes, it could serve a vital role in demonstrating the power of the new operating system.

Windows 10 is a unified platform
Compared to its predecessor, Windows 10 is a far more coherent operating system. Windows 8 was widely criticized for its dual user interfaces, which excelled individually but did not work well together. Windows 10 fixes the problems most users had with its predecessor, deftly merging the traditional desktop and modern interfaces.

But more than just interfaces, Windows 10 merges multiple app stores into a single, unified Microsoft storefront. Universal apps written for the new store will work across all Windows 10-powered devices -- phones, tablets, PCs, and the Xbox One.

Continue Reading Below

Microsoft management argues that a universal app store should attract greater developer interest. Global market share for Windows Phone may be in the single digits, but there are hundreds of millions of Windows PCs and an increasing number of Xbox Ones. In the past, developers have ignored Windows Phone, but with a universal app store, that might change.

It might also prompt the creation of new, radical form factors. The Windows 8 release facilitated the development of tablet hybrids and transformers -- Microsoft Surface Pro 3 being the quintessential example. Unlike the original Surface RT, the Surface Pro 3 is powered by an x86 Intel processor which allows it to run traditional Windows applications.

Microsoft Windows Phones, in contrast, remain ARM-based, limiting them to the few apps developed for the Windows Phone app store. Microsoft plans to offer a modified version of Windows 10 exclusive to these ARM-based smartphones and tablets. Those devices would have access to the newly developed apps but would still lack the ability to run traditional desktop applications.

However,Intel's recent strides in the smartphone space should make full Windows 10 smartphones possible, and by extension, allow for the creation of phone-laptop hybrid devices. The upcomingAsusZenPhone 2, for example, sports an Intel Atom Z3580 processor.Admittedly, it's just one phone among many, and Microsoft's partnership with ARM-based Qualcomm is well-established, but an Intel-powered Windows phone may be feasible.

Android OEMs have tried -- and failed
The idea of a phone-laptop hybrid is not new -- various Android OEMs have been attempting to offer such a device for years. Motorola unveiled the Atrix in 2011, while Asus launched the PadFone X last year. Despite generating some early buzz at the time of their unveiling, these devices have largely failed to catch on.

But what they lacked was Windows. The Atrix ran a goofy, modified version of Linux -- the PadFone relied on Android, an operating system ill-suited to traditional mouse and keyboard input. Where those devices failed, a full Windows 10 phone could succeed, offering users the traditional Windows desktop they're familiar with.

With less than 3% of the global smartphone market, Microsoft needs something torejuvenatethis struggling business. A phone hybrid -- paired with Windows 10 and the new app store -- might just do the trick.

The article What Microsoft Didn't Show Us Last Week Could be Huge originally appeared on Fool.com.

Sam Mattera has no position in any stocks mentioned. The Motley Fool recommends Intel. The Motley Fool owns shares of Intel, Microsoft, and Qualcomm. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.