Microsoft's CEO Satya Nadella was in Sydney on a brief visit Down Under last week in which he addressed a local developers conference to outline its advances in cognitive computing, and increasing strength of its AI-driven Azure cloud-based services. While those were the key topics focused on by Nadella during his keynote, his interview with the Australian Financial Review veered off at times about other matters like the Surface line of products, more specifically Surface tablets and notebook.

The report noted that Microsoft's "Surface line of computers, combined with mixed reality headset HoloLens and popular Xbox One console has got seasoned gadget reviewers scratching their heads about how they are suddenly more excited by Microsoft than Apple devices."

That had become obvious after the back to back Microsoft and Apple events in late October which we covered in a report titled "The Battle between Microsoft and Apple Events focused on the Pro Market Sets Off a Firestorm." The tech press was falling over themselves to applaud Microsoft's entry into the desktop market with their Surface Studio while going out of their way to either yawn or shoot arrows at Apple for their flashy consumer Touch Bar that the Pro market didn't seem to care about as they were too busy screaming about killing the SD Card slot and forcing them to use multiple dongles.

When the interview touched on devices, Nadella noted at one point that the company would not rush back into the smartphone market to try to compete with Apple and Samsung despite rave reviews for recent devices.

That certainly didn't slam the door on a future smartphone and in fact hinted that they'd be back once they had something the company could really get behind; something that could deliver a solution or give customers an advantage.

While Microsoft's CEO may one day throw a few hard landing left hooks and really get into a couple of long punishing rounds with Apple head to head, at present Mr. Nadella is quiet in his critique of Apple. He's a quiet gentlemen in comparison to the bombastic Steve Ballmer.

Yet the one dart thrown at Apple in this Australian interview was this: "I mean, take even Surface. Three years ago, the two-in-one as a form factor was questioned. Does anybody need one? And now guess what, even our competition has decided that it's not a refrigerator and a toaster but it's actually a two-in-one." Nadella never mentioned Apple or its CEO by name as the one who made that comment.

Cook's statement was actually made during Apple's Q2 financial conference call. In the Q&A segment of the conference call, Cook was asked if Apple would compete with the coming Wintel hybrid Ultrabook that will double as a tablet. Cook stated that "You can converge a toaster and a refrigerator, but those things are probably not going to be pleasing to the user."

Nadella was laughing because since that famous line was made Apple has introduced their iPad Pro line which is without a doubt a form of 2-in-1 like Microsoft's standard Surface line of tablets. It forced Apple to introduce the Apple Pencil and soft keyboard … just like Microsoft's Surface line of tablets. Cook's commentary was made prior to the Surface Book. So the hybrid at the time was aimed at the Surface tablet for the most part.

It reminded me of Apple's Phil Schiller mocking Samsung's phablet and telling the world that the right design was a small display where a user's thumb was king in working the interface. Of course a long two years later and Schiller's dream of the perfect smartphone went up in smoke as they introduced the all-new "Plus" line of phablets that saved Apple from suffering a major decline in the market.

The debate over notebook hybrids continues to this day with Apple's Apostle Schiller deciding to double down and dig in deeper against the hybrid concept. According to Schiller, Apple's tiny inner circle tested Mac hybrids and thinks that they're wrong if not downright evil, a blasphemous concept that will never ever see the light of day at Apple, even if Microsoft's tablet/notebook sales have enjoyed a 38% leap last quarter while iPads were falling once again.

It's now a concrete proven trend that is pushing the likes of heavyweights Huawei and Lenovo to jump into this market sometime next year and abandon their Android OS tablet offerings and plans. The hybrid is seen as the next wave for notebooks and tablets.

Huawei is already breathing down Apple's neck in the global smartphone race and are entering the U.S. market beginning as early as January 2017. Huawei's CEO has been continually stating in the press that they intend to overtake Apple in the smartphone race over the next 3 to 5 years. Dumping Android tablets for Windows 10 hybrids will give Huawei of an edge in corporate America. Microsoft on the other hand is looking to recreate a new Wintel base that will give them the power and scale they need to take Apple head on.

If Huawei is thinking of jumping on board the Windows 10 Hybrid notebook market, then there's an excellent chance that smartphones with Windows 10 will be next. HP began this trend with their new Elite X3 smartphone/computer. A consumer model is rumored to be coming in 2017. Microsoft went into hardware to prove to OEMs that they get where their old business model went wrong; That they fell asleep at the wheel and let Apple kill their market and make their OEM's road kill in the process.

Yet today, no matter how great a quarter Microsoft had in terms of tablets and hybrid device growth, it's still dwarfed by Apple's complete and utter dominance in the tablet world. At this stage of the game, Microsoft is never going to turn the tide against Apple alone, as that ship sailed long ago.

However, the hybrid notebook market that Apple is unwilling to challenge is the very door that Microsoft and their growing base of OEM's see as their way in to grind Apple's iPad dominance to a halt over the next five or more years.

The more that Apple fights this trend that consumers are beginning to warm up to, the faster Microsoft could win over volume based OEMs from the Android world which is what is needed to rack up the numbers against the iPad quickly.

While the outcome of this coming war won't be decided on in today's article, or the commentary that will come in our comment section, it's the trend that Patently Apple will continue to monitor very closely. I still believe that Apple's one-time invention that their competitors are now running with will be a winner in next five or six years as quality hybrids and reasonable prices emerge.

Today, many of the cheap models racing in to fill this market niche are simply hurting the hybrid category in my view. I should know as I bought a 2-in-1 hybrid from HP earlier this summer and returned it within 72 hours. It was a disaster on wheels. Half the time the touch display wouldn't respond. It was the worst experience with hardware, ever.

While that should have turned me off to such devices, it has not. I'm still convinced that once the foibles are ironed out of the first generation of products, this is going to be the best selling notebook class over the next 5 or 6 years – mainly because Apple is dismissing it. Apple's competitors simply see Apple's dismissal as a gift from heaven that they can no longer pass on. 

The catch, of course, is whether or not Microsoft has what it takes to climb back to being an industry leader and take Apple head on. Yet if the reaction to the new Surface Studio is any indicator, then the tech press may have decided that the new underdog in town may in fact be Microsoft in another historic turnaround story in the making just as Apple was at one point in time.

Is it an attainable dream or fantasy of the walking dead? Only time will tell.

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