Microsoft Expected To Have Larger Role In Tablet Market Than Most Assume

Citigroup has published a research report on Microsoft Corporation (NASDAQ: MSFT) as concerns surrounding the tablet market continue to arise and remain prominent.

In the report, Citigroup writes "Survey-based research suggests market concerns around tablet impact on Microsoft are over-blown. In a severe case (40% tablet market CAGR, 70% cannibalization and 15% MSFT share), this would erase ~$3/share from MSFT, although our most likely case suggests impact is ~$1/share. Purchase intention questions show potential purchasers of tablets are about 1/3 as numerous as potential purchasers of traditional PCs. Buyers have higher income and the device is likely to be used for content consumption such as web-surfing and email. Survey results suggest 30-35% of tablet purchases are made in lieu of buying a traditional consumer PC. Interestingly, half of prospective tablet buyers bought a new PC in the last 12 months, which also suggests the device is additive in many cases."

Citigroup maintains its Buy rating and $32 price target.

Microsoft Corporation closed Friday at $25.69.