Microsoft is launching the Surface Duo next month, its ambitious foldable phone with two screens that opens and closes like a book. Here's how it works.

Microsoft's Surface DuoMicrosoft

• Microsoft announced that the Surface Duo, its first foldable smartphone, will launch on September 10 for $1,400.
• The device consists of two separate 5.6-inch displays that work together to form one 8.1-inch display when opened.
• Microsoft is touting the phone's software as one of its big selling points. It showcased how apps will work across both screens, and how content can be easily transferred between displays.
• The Surface Duo also comes with a 360-degree hinge that enables it to open like a book, fold all the way back like a smartphone, and assume other forms as well.
• But Microsoft is entering an increasingly competitive market that's already becoming crowded with rival devices from Samsung, Huawei, and Motorola.
• It's also unclear whether there's consumer demand for such devices, especially as less expensive phones are becoming more popular.

Smartphone giants like Samsung, Huawei, and Motorola have an unlikely new challenger in the foldable phone market: Microsoft.

The company unveiled its first foldable phone, the Surface Duo, back in October 2019, but only just announced on Wednesday that the device will officially launch on September 10 for $1,400 with preorders starting on August 12.

The Surface Duo represents Microsoft's first major re-entry into the smartphone market since it abandoned its Windows Phone platform. Microsoft is positioning the Surface Duo as a productivity device, much like the rest of its Surface lineup, designed for those who frequently multitask on their mobile device.

As its name implies, the Surface Duo consists of two 5.6-inch AMOLED screens connected by a 360-degree hinge. Unlike other foldable phones on the market, the screens remain physically separated even when the phone is fully opened, but Microsoft says the two screens will still function as one large 8.1-inch display. Microsoft is calling it the thinnest foldable mobile device yet.

Microsoft is the latest major tech company to make a big bet on foldable gadgets that provide the benefits of both smartphones and tablets in one device. Samsung recently announced its third foldable phone, the Galaxy Z Fold 2, which also has a clamshell design but differs from the Surface Duo in many ways.

Huawei also debuted its first foldable phone in 2019, the Mate X, which includes flexible screens that fold outward, almost bending like paper. And Motorola revived its beloved Razr flip phone from the early 2000s as a foldable smartphone last November.

Microsoft, however, is banking on the notion that combining two standalone displays that can work together as one will be more beneficial than launching a device with a flexible screen that folds in two. This enables Microsoft to use thicker glass for the screen and makes it compatible with the same Surface pen it offers for its tablets.

Still, it's unclear how appealing foldable smartphones are to consumers. The smartphone industry as a whole seems to be transitioning towards mid-tier phones and away from four-figure flagships. According to market research firm Gartner, foldable phones are only expected to account for 5% of high-end smartphone sales by 2023.

Here's a closer look at how the Surface Duo works.