Apple could generate $1 trillion in annual revenue with continued expansion of its various businesses through acquisitions and investments in areas such as banking, research, health and Apple Car that are able to help propel the company to this milestone by 2030.
In January, Apple became the world’s first public company with a market capitalization of $3 trillion. But while it is a giant in the stock market, it still lags behind the others when it comes to revenue.
New York University marketing professor Scott Galloway noted that Apple generated $ 366 billion in revenue, just over a third of the way to that milestone. However, this is well below Amazon’s $470 billion in revenue and Walmart’s $559 billion in revenue.
Galloway explained that the company has quite a few areas it can work on to get to that level. But you may have to expand markets away from other established companies in order to drive growth.
Apple benefits from its presence in many different areas, with an ecosystem and a variety of services closely related to each other.
The company needs capital in order to expand. It generated $93 billion in free cash flow in 2021. In addition to a research and development budget of $22 billion.
Galloway suggests that the company has $126 billion annually to invest in its various businesses, including through acquisitions.
It can also use its shares as currency. He pointed out that technology companies usually make acquisitions of about 10 percent of their market value. That gives Apple another $290 billion to use.
Galloway spoke about retail banking, where the company owns the capital and trust that banks provide to customers, as well as Apple Pay and Apple Card.
Hypothetically, Apple could offer the consumer Apple Cash account, along with other standard account-related features, before expanding into loans, investments, and mortgages.
And since the big US banks manage about $35 billion in annual consumer banking revenue. Galloway believes Apple Bank could become a $75 billion business by 2030.
Will Apple reach $1 trillion in annual revenue?
Search is also a potential path, which begins with Apple losing billions from its default search deal with Google. However, Galloway believes that keeping searches within the company’s ecosystem and results integrated with contacts, calendars and other user information can make the business more valuable.
Although the company may not generate the same revenue as Google from advertising. But it is estimated that it could generate $50 billion in revenue by 2030.
And while the company has been interested in healthcare for a while, Galloway predicts that Apple could turn services, and could earn $17 billion a year from making CVS the default provider of integrated healthcare on the iPhone.
It also assumes that the company can become a CVS by following the model of delivering any healthcare item to the user’s door. It is believed that this could reach $75 billion by 2030.
On the fitness side, Galloway values Peloton at $10 billion, making the sports bike company a potential acquisition target, which could make fitness a $20 billion business by 2030.
It is estimated that home automation has an $80 billion market. It can be accelerated through research and development worth $22 billion. It is believed to be another $20 billion opportunity.
After a conservative estimate of taking $25 billion in Tesla sales for Apple Car plus electric vehicles as a high-growth market, the business has been speculated to be $50 billion by 2030.
Galloway also says identity and education services could add another $10 billion to the total. There are business-to-business operations such as payment processing, which can be enhanced through the “click to pay” feature that enables mobile payments.
And there’s $10 billion that Apple must spend on its infrastructure to be able to move away from Google and AWS.
Although he has put in place a big investment plan, Galloway concludes that this may not necessarily happen. The company is run with a great deal of discipline.
For example, the company’s largest acquisition is Beats. The company paid out $3 billion in this transaction nearly 8 years ago.
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