We heard earlier today that Microsoft has demonstrated a folding Surface laptop to Microsoft employees. Few other details were revealed, but we have been pinged by sources who attended the all-hands event and are able to provide a bit more colour to the report.

Besides the video, Microsoft’s Panos Panay did indeed show off a device, with long lines of employees queueing to view a hands-on. No employees were allowed to touch the device, however.

The laptop does have a  dual-screen (we are not sure if it is flexible or two separate parts, though we suspect the first) which folds inwards like the Samsung Galaxy Fold, and the device can be used as a typical clamshell laptop, with one half forming the keyboard base and the other the screen. Update: we have confirmed it is a dual-panel device, not a flexible screen, which should keep costs down and avoid the pitfalls of current flexible screen devices.

Uniquely however Microsoft will also offer a keyboard accessory similar to a type cover which can be placed on top of the bottom screen to offer a better typing experience.  When the keyboard accessory is moved towards the centre of the fold a “trackpad” will appear on the newly exposed screen, simulating a normal laptop.

Our sources also confirmed that the device will run Microsoft’s new Modern OS, which is designed to be simple to use, has the ability to adapt to different form factors, and which will be able to update without interrupting the user. According to our source, it will run win32 apps such as Office as well.

It is not known yet when the device will hit the market, but given the early stage of development of both the hardware and OS, it seems unlikely that it will be this year.