Microsoft (NASDAQ: MSFT) generates most of the revenue from software and services, but also owns a growing hardware department that produces Surface devices and Xbox consoles. In 2018, it launched four new Surface Goals – Surface Go, Surface Studio 2, Surface Pro 6 and Surface Laptop 2. It also excited the sales of Xbox One X, launched in late 2017.
Last Quarter, Microsoft's Revenue – coming from Surface devices, PC accessories and other devices – 9% grew annually to $ 1.26 billion, or 4% of the top line. Within this, surface revenues increased by 1
These figures show that Microsoft will continue to evolve into a hardware company to lock multiple users into its application system. Microsoft has not yet provided a clear roadmap for the hardware business yet, but here are five units the company could reveal this year.
1. Surface Book 3
Microsoft launched Surface Book 2 back in October 2017 so that the popular 2-in-1 device could see an upgrade this year with Intel its ninth generation CPUs, NVIDIA 's new Turing GPUs, and a 4K display.
TechRadar believes Microsoft will launch Surface Book 3 between September and November to capitalize on back-to-school and vacation shopping seasons. It can give it an edge over the iPad (NASDAQ: AAPL) iPad Pros and the new 10 "iPad and iPad Mini, both of which could come in the second half of 2019.
2. Surface Pro 7  Microsoft upgraded Surface Pro (2017) to the Surface Pro 6 in October so we could see the Surface Pro 7 arrive at the end of 2019. The Surface Pro 6 added an eighth generation Intel CPU and new color choices, and the Surface Pro 7 may include a ninth generation CPU, smaller fittings and USB-C ports – which were strangely absent from Surface Pro 6 and Surface Laptop 2.
3. Surface Phone
Last year, a leaked document reported that Microsoft developed a new portable device named Andromeda document, called Microsoft Andromeda "a new pocketable Surface device form factor that brings together innovative new hardware and software development to create a truly personal and versatile computing. "
Based on the illustrations in Microsoft's patents, Andromeda can be a dual screen foldable smartphone where a monitor can be used as a primary keyboard, but if Microsoft really launches Andromeda as a Windows-powered phone, it faces a tough uphill battle against iOS / Android duopoly in the smartphone market.
In addition, Android OEMs launch two monitors – including ZTE 's Axon M, Royol's foldable FlexPai, and a collapsible Samsung phone, which can start this year
4. Second Generation HoloLens
Microsoft launched the first generation HoloLens back in 2016, but only early users and enthusiasts who paid $ 3000 for the developer release have spent considerable time with the mixed reality headset.
Instead of rushing toward a regular launch, Microsoft plans introducing a second generation developer edition HoloLens in the second half of 2019. The unit is expected to be smaller and thinner, to enhanced light sensors and localized AI samprosessor, and have a wider field of view and longer battery life. The device can help Microsoft skip the latest AR headphones like Magic Leap One and remain ahead of Apple – which also happened in AR software and hardware.
5. Next-gen Xbox consoles
Microsoft will probably not launch a new Xbox One console in 2019, but it can give us early glimpse of the next two Xbox consoles, which are codenamed Anaconda and Scarlett Cloud.  Anaconda will eventually succeed Xbox One X with major hardware upgrades, while Scarlett Cloud will become a cheaper console optimized for cloud-based games . A cloud-based game console will complement Microsoft's cloud gaming bet and boost the Xbox department with higher margin revenue.
Microsoft's evolution from a software company to a hardware naturally expands its ecosystem and diversifies its business away from Windows and Office licenses. Tethering more businesses and consumers to that ecosystem also strengthens its commercial cloud industry, which increased 47% annually to 8.5 billion last year.
It also expands Microsoft's moat against Apple and Alphabet s Google, which conquered the smartphone market and forced to rely more on 2-in-1 PCs and game consoles to remain relevant. Therefore, investors should keep track of Microsoft's hardware launches and growth of devices and gaming devices in 2019.