Apple’s historic $1 trillion milestone could soon be seen as a minor achievement on the way to even greater things.
Alhough it was the first U.S. publicly traded company to reach a $1 trillion market cap, Apple watchers think the company has plenty of growth ahead.
“This is not the end, that they hit $1 trillion,” GBH Insights analyst Dan Ives told CNBC Thursday. “I view this as just kind of speaking to a new stage of growth and profitability.”
Here’s how Apple can grow well beyond $1 trillion.
iPhone sales growth may be slowing, but profits keep cranking along. For Apple’s fiscal third-quarter this year, Apple posted better-than-expected profits fueled by the iPhone business. That’s thanks to the iPhone X, which starts at $999. The X juiced Apple’s average selling price (ASP) of the iPhone to $724 and proved that Apple has the unique ability to keep profits growing at a healthy pace off a relatively flat user base. Samsung and other smartphone rivals have failed to recreate that winning formula.
The trend could continue, too.
According to spot-on tech analyst Ming-Chi Kuo of TF International Securities, Apple plans to release a larger version of the iPhone X this fall. That phone will be even more expensive than its thousand-dollar little brother, and will likely drive the iPhone’s ASP and profit growth even higher. There may never be a repeat of the iPhone 6 “super cycle,” where a new large-size screen drove both a massive number of upgrades and new customer growth, but as long as the company can keep raising prices without scaring customers off, profits should keep growing.
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