Citigroup (NYSE:C) Says Tablet Effect on Microsoft (Nasdaq:MSFT) Overestimated

Some analysts believe the effect on Microsoft (Nasdaq:MSFT) of tablet PC sales will be extremely detrimental to the software company, with some estimating a loss of $3 a share. Citigroup (NYSE:C) says they see that as overly pessimistic, and see losses at most of about $1 a share annually.

In a worst case scenario, if growth in the tablet PC market was 40 percent annually, Citigroup sees a potential cannibalization rate of about 70 percent and market share for Microsoft at about 15 percent.

That scenario would create about a $3 a share drop for Microsoft if it were to happen, according to Citi.

As mentioned though, Citi sees a loss of $1 a share the more likely consequences.