 |
| Apple could generate $1 trillion in revenue by 2030 |
Through acquisitions and investments in areas such as banking, research, healthcare, and the Apple Car, Apple's annual revenue could reach $1 trillion as it expands its various businesses, which could help move the company to that milestone by 2030.
In January, Apple became the world's largest public company with a market capitalization of $3 trillion. Despite being a giant in the stock market, it lags behind other companies in terms of revenue.
Scott Galloway, professor of marketing at New York University, noted that Apple's revenue was $366 billion, just over a third of that achievement. However, this is well below Amazon's $470 billion in sales and Walmart's $559 billion in sales.
Galloway explained that there are many areas the company could work on to reach this level. However, you may need to expand the market from other existing companies to other companies to drive growth.
Apple benefits from its presence in many different areas, and its various ecosystem and services are intertwined.
Businesses need capital to grow. It generated $93 billion in free cash flow in 2021. There's also a $22 billion research and development budget.
Galloway said the company has $126 billion annually to invest in its various businesses, including through acquisitions.
He can also use his shares as currency. He noted that technology companies typically make acquisitions of around 10% of their market value. This gives Apple another $290 billion to work with.
Galloway spoke about retail banking, the company that owns the capital and trusts banks to offer its customers, in addition to Apple Pay and Apple Card.
In theory, Apple could offer an Apple Cash account to consumers along with other standard account-related features before expanding to include lending, investing, and mortgages.
While the major US banks handle about $35 billion in annual banking revenue to individuals. Galloway believes Apple Bank could reach $75 billion by 2030.
Will Apple's annual sales reach a trillion dollars?
Search is also a potential avenue, starting with Apple losing billions of dollars in its default search deal with Google. However, Galloway believes that searching within the company's ecosystem and integrating the results with contacts, calendars and other user information can make the company more valuable.
Although the company probably won't generate the same revenue as Google from advertising. But it is estimated to generate $50 billion in revenue by 2030.
Although the company has been in healthcare for some time, Galloway expects Apple to tap into the services and make $17 billion a year by making CVS the default integrated healthcare provider on the iPhone.
It is also believed that companies can become CVS by following a model of delivering all elements of healthcare to users' doorsteps. It is believed that this figure could reach $75 billion by 2030.
In the fitness business, Galway Peloton is valued at $10 billion, making the exercise bike company a potential acquisition target that could turn fitness into a $20 billion business by 2030.
Home automation is an estimated $80 billion market. It could be accelerated with $22 billion in research and development. This is seen as another $20 billion opportunity.
Conservative estimates place Tesla in a high-growth market of $25 billion for cars and Apple electric vehicles, with business expected to reach $50 billion by 2030.
Galloway also said identity services and education could add another $10 billion. Some inter-company operations, such as services such as payment processing, could be improved with click-to-pay capabilities that support 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.