Well as the article up top mentions, the app itself is basically the console. The console is just software. In theory, it will just be a green square you click on whatever hardware you want (PC, handheld) and it opens into an Xbox UI and has your library. Or load in other stores on PC.
The big sticking point according to this article is transitioning that older library through emulation or streaming. We're already almost at the point where any hardware will load in a similar looking Xbox UI experience. You're seeing the first steps of it on the Ally X.
All the new hardware was going to be is a PC from the surface team doing the same thing as the 3rd party ones, just made by MS themselves. It just has a Windows big picture mode so you hook it up and play relatively easily, and it integrates your libraries from Steam / GoG / Epic also.
The only actual challenge left is the Xbox console library getting transferred to Windows. It sounds like it may be a messy mixture of Play anywhere, emulation and streaming. We'll see.