We will see handheld PC's with similar GPU power to a Series S soon with the Radeon 780m maybe it would be viable to release a $500 handheld with equivalent performance to the Series S by the end of 2024 but I don't think it's something Microsoft is going to do. Their gaming business is now on PC and Cloud they have less reason to make a Handheld now than they ever have in the past. Their are handheld devices already out there they can sell you their games and subscriptions on.

At this point I'd think they'd sooner abandon their hardware business all together than release a non-streaming handheld.

Their time was 2005-2013 or so when they were putting out the Xbox 360 and at the end of its life when they had made a lot of money on it. Xbox is into selling subscriptions and services, something like the Switch or even the Steam Deck is a waste of money for them. Playing their games on a phone, Steam Deck, or gaming laptop seems more than enough for them in the mobile space.
I know it's not all about winning in revenue or profits, but Nintendo is unbeatable in the handheld market. Even their strongest competitor, the PSP, still fell quite short of the best-selling handheld of all-time, the DS.

I thought about this some time ago, however this video goes in depth way more than I could or would.
My suspicion actually rose from some Coreteks video a few years back where he stipulated that APU were going to eventually define gaming trends (he wasn't referring to console APU but low power cheap pc and laptop APU) and looking now at the 680m on chips like the 6800u he was pretty accurate.

However even if we assume 100% accuracy and series S is a trojan horse, it's not clear it actually is to:

• Build their own handheld in the future
• Just keep this possibility open
• Eventually produce a S slim that could target sub 100$ price point
• Make sure that their game, when played on PC (and third party handled), offers a maximum range of configurations.
• all of the above

 If it turns out to be the case and MS does produce a handled Series S-like, I would certainly be interested in it. So there's that. 

I believe people are looking at this wrong.  I believe he is saying MS is looking to create the Series S like the Switch, where it can be a mobile device as well as a plug in console.

Yep that's his conclusion, which is entirely possible based on his reasoning and the facts he presents. However, I'm not entirely convinced that other incentive might not be what motivated MS to go for an entry point Series S with such specs in the first place.

Put it in another way, if you watch the video but replace the conclusion of (building a trojan horse to later create a switch like experience) to (building a trojan horse to make sure maximum compatibility with future low power/entry point laptop APU (by doing so maximizing the pool of potential pc GamePass users)) all his reasoning also work for this conclusion. Those line of thought may not be mutually exclusive either.

No.

It's not quite as simple as just GPU power either, as there are lots of other factors that would affect how viable it would be; bandwidth, SSD, CPU, battery life, heat generation and cooling, and size are all issues for a handheld device.

Even if you hit your performance target, it won't be very appealing as a mainstream portable device if it is bulky and has poor battery life.

All those concerns are all related to the power consumption of the device. Most of the video focus on this and why it is possible to get the power consumption low enough for it to work.

The Series S is using about 80 watts peak from the wall which is already impressively low but he highlights many way this can get down:

• Using battery vs outlet save already about 10% from the inefficiency of converting AC to DC
• Node shrink from 7nm to potentially 3nm
• Lower power needed through limiting the output resolution when handheld

A great comparison I think is to compare the Series S to the 6800U. The 6800U have peak GPU (680m) performance of 3.68tfs which is very close to that of the Series s 4tfs. However the 680m is limited by 16 cu which force it to run at higher clocks with added inefficiency. The 680m is also Rdna3 and the video suggest that such device form MS would use Rdna4 with better efficiency. The 6800U is also used in similar device to what is suggested of a Series S handheld like the Ayaneo 2. 

Now it is true that an even lower performance when handheld might be problematic in some case but if MS were to go this route I would support MS to allow dev to require the device to be docked when playing specific titles that have no room to spare on series S like those running 900p 30fps (which should be marginal anyway).

The Ayaneo 2 is an interesting device to me but the price is too high. But get me an Ayaneo 2 like device, that cost $500 or less and that can play Xbox GamePass titles and I'd be like :

Here is another article with senior MS developers trying to get WIndows 11 to work in handheld mode. I really do not see anything happen this year but we could see something next year if MS really push for it and redesign the Series S like a switch device.

microsoft-windows-handheld-mode-gaming-xbox-steam-deck

Teraflops is a garbage Metric. Don't use it.

Less CU's and higher clocks isn't inefficient, it can actually result in better performance per watt.

Let's take the Vega integrated graphics for example on AMD's APU's...

My old Laptop with a Ryzen 2700U @25w TDP verses my other old laptop with a 4500u @ 25w TDP.
They are both based on Vega graphics.

The 4500U
* Vega 6CU's @1,500mhz. - 1.15 Teraflops.

The 2700U
* Vega 10CU's @1,300Mhz. - 1.64 Teraflops.

On paper the 2700u should own gaming performance. - Same graphics architecture, more CU's at a lower clock. Same TDP.

Yet, the 4500u in real world gaming will always win. - Why? It's a balancing act, CU's consume power, clockspeeds consume power, there is an inherent efficiency curve in all processing architectures, where you get the most performance per watt at a given clockrate.

AMD through several generations of trial and error determined that higher clockspeeds can provide more performance even with less CU's... Provided other bottlenecks are also removed like Bandwidth limitations.

I would even pick something like the 5500u over the 4700u, same bandwidth, same CU count, same TDP, but the 5500U has far better GPU performance thanks to just the higher clocks.