Well I'm not even totally convinced MS is 100% certain of what to do (by that I mean streaming handheld, dedicated handheld, streaming device, dedicated console, hybrid console etc., I'm sure they are exploring all options and and have working prototypes of them all), a handheld has even more competition than it currently has fighting Sony (they would have to fight Nintendo, possibly Sony also if they make their own full handheld, as well as lots of different PC manufacturers and Steam with the Steam Deck). And a PC/console hybrid, again, is there a point to that? isn't that literally just a PC, which has loads of options from low end to very high end at a variety of price points.
I just think its going to be a very hard sell for MS to do anything in the hardware space at all, I actually think the current strategy of a dedicated console is actually probably their best bet, if, they just go out of sync with Sony. Can they bring out a next gen console at the end of next year/beginning of 2026 that's more powerful than the PS5 Pro and make it cheaper (or at the very least subsidise the heck out of it, but that's a major problem they have had this gen)? But then Sony is still in the driving seat, they can just monitor the market, if they see MS making any headway the very least they could then do is announce the PS6 even if its released 12-18 months after they announce it.