Microsoft Surface Duo Strategy: Hardware with an Original Point of View That Builds on Microsoft’s Software Platform (Just Not Windows)

Surface Duo closed, with optional Surface Pen and Surface Buds

Bottom Line

Microsoft’s Surface Duo is the company’s first foray back into smartphones after abandoning Windows Phone. The dual-screen device looks like nothing else on the market. While the Duo is based on Android 10, Microsoft’s software is integrated throughout the device, from custom windowing and orientation modes to Microsoft’s Android Launcher and Microsoft365 apps. The price is high and it won’t appeal to everyone, but you can’t fault Microsoft for creating a me-too product.

Microsoft blog post: https://blogs.windows.com/devices/2020/08/12/available-for-preorder-today-surface-duo-is-purpose-built-for-mobile-productivity/

Analysis

In a briefing to analysts and journalists yesterday, Microsoft’s Chief Product Officer Panos Panay used a phrase that sums up the Surface Duo: “an original point of view.” Microsoft was not itching to reenter the smartphone market with a standard offering; it wouldn’t work, and in any case it isn’t necessary: Microsoft has a partnership with Samsung to put Microsoft software on Galaxy phones and tablets that continues to benefit both companies. (Just last week I wrote that focusing on Microsoft365 apps along with entertainment use cases is the best way to get the most out of Samsung’s upcoming Galaxy Tab S7+.)

The Surface Duo is designed for mobile productivity, with three areas that set it apart: the hardware design, the user interface design, and Microsoft’s complete suite of apps and services.

Hardware

The main design distinction is the 360 degree hinge connecting two discrete 5.6” AMOLED 401 PPI displays. Each display is in a boxy 3:2 aspect ratio, meaning there is a lot of screen real estate compared to the long-and-narrow 5.8” – 6.9” displays on most other smartphones. The dual screens enable quick and easy multitasking in defined spaces. Alternately, apps can be extended across both displays, with a relatively small bezel dividing them. Microsoft insists that the dual display concept is intentional, and not due to cost or durability issues with flexible displays. Providing separate spaces for different apps to fill supposedly lowers cognitive load and enables better productivity (more on this below). The gorilla glass displays can also stand up to Surface Pen use in a way that flexible screens cannot, and Pen input is a core use case across most Surface products.

Interface

“Lowering cognitive loads” sounds like marketing gobbledygook, but Microsoft is serious. The Surface Duo is based on Android 10, but Microsoft has added software that seamlessly changes the user experience based on how you are holding the Duo and using its apps. With the Duo closed, you can lift up the display slightly to peek in on notifications. Folding one screen all the way back turns the Duo into a single-screen phone. When horizontal (book orientation), the keyboard hugs the outermost edge on each display for easier typing. Turning the device vertically moves the keyboard (or game controls) to span the full length of the bottom display.

Microsoft has been building a Launcher for Android since 2015, and the version on the Duo is heavily tuned for the Duo’s dual displays. Held horizontally, a task bar spans both displays, but swiping up on either side opens up the app drawer just on that display; launching an app fills that screen. Simple gestures move apps from one screen to the other, and information can be dragged and dropped from an app on one screen to an app on the other. If only one app is open and the user selects a link, the linked content will open on the other screen so you don’t lose your place.

Microsoft makes it easy to set up app pair icons to launch apps that are useful together. The possibilities are endless. Examples include mail and calendar, watching a game and tracking stats on a website, watching content and commenting on Twitter, conferencing apps and an app for taking notes, and more. There are also creative use cases, such as taking photos while sketching to capture ideas or identify design trends.

Invoking another gesture – hovering an app near the hinge – will span the app across both displays. All Android apps will do this, though the bezels down the middle may make some apps – especially video content – less than ideal. However, if the app has been designed for the Duo, it can use both displays to display a richer interface than simply stretching the app across the screen. For example, Outlook has folders on the left, and individual email on the right. Teams, OneNote, and many other preloaded apps support this mode, too. At launch, there will be a limited number of third party apps that do this from Adobe, Spotify, and Amazon (the Kindle app is beautiful), but Microsoft has worked with Google to release the APIs as part of Android, so this number may grow.

Microsoft365

While historically Microsoft was oriented around Windows, today’s Microsoft has multiple multi-billion-dollar platforms that work across different operating systems, including Microsoft365, Azure, Dynamics, and Microsoft’s developer tools. Surface Duo is a showcase for Microsoft365. All of Microsoft’s Android apps have been updated with the Surface Duo in mind, and there are a lot of them. The Duo’s default email client is Outlook, Edge is the default browser (with support for different profiles on each display), OneDrive provides cloud storage, OneNote for notes, Teams for collaboration, To-Do for lists and reminders, and of course the full complement of mobile Office apps, including Lens for scanning. Microsoft isn’t crazy; this is still an Android phone, so Google’s Assistant is the default, not Cortana, and Google Search is included alongside Bing.

Microsoft has not forgotten about Windows. The Your Phone app for Windows mirrors the Surface Duo completely on the desktop, even switching app orientation and modes when the user changes the Duo’s orientation. The Your Phone Windows app works with the Duo closed as well.

Microsoft is being somewhat cautious with the first iteration of the Duo line; it is initially launching just in the United States, with just a single carrier retail partner, AT&T. The Duo can also be purchased unlocked from Best Buy or Microsoft.com for use on all three national U.S. carriers. The Duo will not appeal to anyone buying a phone on price or specs; at $1400 it is undeniably expensive compared to phones with faster processors, 5G, and additional cameras. The Duo is also missing NFC, wireless charging, and an external display for notifications while keeping the main screens folded closed. The Duo’s 3577mAh battery seems rather slight, but Microsoft claims all-day battery life, so this may not be an issue in actual use.

Competitive Landscape

There are only two other products on the market remotely like the Surface Duo: LG’s Velvet with DualScreen accessory ($800 combined), and Samsung’s Galaxy Z Fold 2 (price TBD, but the original Fold sold for just shy of $2,000).

LG has tried to get its DualScreen accessory to offer some of the multitasking and utility that Microsoft is bringing to the Surface Duo, but LG’s interface is not as elegant, and it lacks Microsoft’s suite of apps that take full advantage of the form factor. LG’s hardware is downright clunky. The Velvet phone itself is striking and svelte. However, when placed in the DualScreen case it is unbalanced when open and extremely thick when closed. The Velvet has many advantages for someone looking for a 6.8” 5G phone at an affordable price, and the DualScreen accessory is interesting, but the combined experience is a compromise.

Samsung’s Galaxy Z Fold 2 will almost certainly be many hundreds of dollars more expensive than the Surface Duo, though early adopters may not be all that price sensitive if they want it badly enough. The Galaxy Z Fold 2 will have some of Microsoft’s productivity software, but the windowing experience will be radically different. The Surface Duo is inherently more durable and offers optional Pen input, while the Galaxy Z Fold 2 has an uninterrupted display – no bezels running down the middle – which should be better for video content. Techsponential is looking forward to testing both.    

Conclusion

The Surface group at Microsoft has a history of sticking with its projects. The key will be finding consumers who value Microsoft’s mobile point of view – and the unique productivity and creative experiences that Microsoft has engineered in – enough to justify buying this first version. There are millions of consumers who are standardized on Microsoft’s software ecosystem, and, increasingly, Microsoft Surface tablets, laptops, desktops, and even headphones. The Surface Duo is for them. Nobody at Microsoft thinks that that the Duo will displace Apple or Samsung, but Microsoft is hoping to create a new category in a mature market, just as it did with the Surface tablet/keyboard cover.

To discuss the implications of this report on your business, product, or investment strategies, contact Avi at avi@techsponential.com or +1 (201) 677-8284.