Xbox handheld all but confirmed by Microsoft Gaming CEO Phil Spencer

It sounds like local gameplay would be the priority but it would be nice if they were to expand the capabilities to enable streaming and then maybe release a lite version that was streaming only.
 
One thing that gets lost in the tea leaf reading: Spencer continues to hype PLAY ANYWHERE. Which means an XBOX-branded windows handheld will meet his needs just fine. All it needs is an XBOX GUI and (maybe) dual boot into full Windows.
No need to cook up an ultra-low power Lockhart, especially if the next gen XBOX will be a similar hybrid: straight off-the-the shelf parts will do the deed. AMD, INTEL, or (hang on to your hats) QUALCOMM. An easy sell at $499. Maybe $399 with a two year Game Pass contract that will take it into the next gen with a trade-in plan.

MS is now very strong on the PC side and PLAY ANYWHERE is a solid hole card they can play to portray a handheld PC as an XBOX.
 
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