An NYU professor believes that by 2030, Apple might reach a trillion dollars in yearly income via acquisitions and investments in numerous companies, including banking, search, health, and the long-rumored Apple Car.
Apple became the first publicly listed business in the world to attain a market valuation of $3 trillion in January of this year. However, despite its stock market dominance, it is still lagging behind competitors in terms of revenue.
NYU professor of marketing Scott Galloway points out that Apple made $366 billion in sales, which is little over a third of the way to a trillion dollars in yearly revenue. In comparison, Amazon and Walmart have a combined market value of $470 and $559 billion, respectively.
On Friday, Galloway said that Apple has a lot of room to improve in order to achieve that level. To achieve growth, though, it may have to expand and take away market share from existing competitors.
An ecosystem and patchwork of services connected to each other is already an advantage for Apple since it has a wide range. Such that professor feels “Nobody other has this, or any apparent way to it.” To that end
The company earned $93 billion in free cash flow in 2021, which it will need to fund future expansion. Galloway estimates that Apple has $126 billion a year to spend in its numerous industries, including acquisitions, on top of a $22 billion R&D budget.
If you take into account the fact that tech businesses normally acquire at roughly 10% of their market value, it gives Apple an additional $290 billion to play around with. “
The route to profit
To begin with, Galloway focuses on consumer banking since Apple has both the money and trust that banks provide to consumers, as well as the Apple Pay and Apple Card companies. Apple could theoretically provide a consumer account for Apple Cash, as well as other account-related services, before moving into loans, investments, and mortgages.
According to the professor, an Apple Bank could generate $75 billion in income by 2030, compared to the $35 billion in yearly consumer banking revenue managed by the country’s largest banks.
Apple might lose billions from its arrangement with Google to be the default search engine in Safari if this option is pursued. Galloway, on the other hand, sees this as a “strategic unlock,” since it may make the company more valuable by keeping searches inside Apple’s ecosystem and integrating results with contacts, calendars, and other user information.
Apple is expected to generate $50 billion in income by 2030, even if it doesn’t have as much ad revenue as Google.
However, Galloway speculates that Apple might pivot into services and make CVS its “preferred integrated healthcare provider on the iPhone” and earn $17 billion a year.
A similar “Jokr-like dark shop” approach might allow Apple to “justbecome CVS” and deliver any healthcare item to the user’s doorstep. It’s estimated that this will bring in $75 billion by 2030.
Galloway points out that the decreased value of Peloton, which sells workout bikes, is around $10 billion, making it a possible acquisition target in the health and fitness sector. Despite Peloton’s prediction of $5 billion in sales in 2022, a professor points out that “that’s without the force of Apple behind it,” which could make fitness a $20 billion market by 2030.
With “that $22 billion R&D cannon,” home automation is estimated to be a $80-billion-a-year business. Despite the fact that Apple is unlikely to enter the refrigerator market, it is regarded to be a “20 billion dollar potential.”
Apple’s long-rumored car might result in “the first $250+ billion transfer of shareholder wealth” from Tesla once Apple unveils its first vehicle. After a “conservative” $25 billion forecast of Tesla sales and the strong growth of electric cars, a $50 billion industry is predicted by 2030.
Identity and education services, according to Galloway, could bring in an additional $10 billion.
Business-to-business transactions, such as payment processing, may benefit from the upcoming “Tap to Pay” functionality, which will enable mobile payments. For firms that don’t require the additional hardware, this might eat some of Square’s revenue.
Finally, Apple plans to invest $10 billion on infrastructure, including its own data centres, in an effort to distance itself from competitors like Google and Amazon Web Services. It’s possible that Apple may enter this market, allowing firms to tap into surplus capacity that would otherwise go unused.
A $50 billion B2B market is predicted by Galloway in eight years.
In a methodical and methodical manner
Despite the fact that Galloway lays out a substantial investment plan, he comes to the conclusion that it is unlikely to be implemented due to Apple’s strict management style. Among the company’s most recent acquisitions, the $3 billion purchase of Beats is a good example.
For a decade or more, they’ve been staring at vehicles, AR, and TVs, according to the professor. It’s probable that Cook & Firm will be the first company to reach $1 trillion, and we believe that it will.