Apple could hit $3 trillion in market capitalization in 2022, according to analyst Dan Ives. Dan Ives From Wedbush Securities.
Shares of the iPhone maker are down 5 percent year-to-date. Investors dumped the company’s shares earlier this year after the historic December quarter.
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Apple is considered the most valuable company in the world, with a current market value of about $2.1 trillion.
It crossed the first trillion dollars in 2018 and $2 trillion in 2020. Analysts, including Ives, have previously talked about Apple’s roadmap to a record $3 trillion.
“We think it needs 12 to 18 months from now,” Ives said when asked about a possible timeline for the next step.
“If you look at innovation and the super-cycles that are playing a role in services right now, I think this is the next stage of growth, and Apple is set to prove to skeptics that it’s still focused on innovation,” he added.
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Apple has been seen as a hardware company for years. While CEO Tim Cook has argued that the company’s iOS operating system has an ecosystem of services built on a base of more than one billion device users. This is a big part of her future.
But the mix of hardware and software has evolved. And the tech giant in 2020 received the biggest endorsement from Wall Street and investors.
Ives estimates Apple’s software services business at $1 trillion today. It is expected to rise to about $1.5 trillion in order for the company’s market value to reach $3 trillion.
And at the Worldwide Developers Conference, or WWDC, on Monday, the company showcased a slew of new updates to its flagship products. It included iOS 15 – the latest version of the iPhone operating system.
New iPhones are also expected to appear later this year. While the company is working on Apple Car as well.
Apple is currently laying the groundwork for the next stage of growth in which software and services play important roles.
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Risks facing Apple:
There are many potential risks that could hinder Apple from reaching the historical market value of $3 trillion.
Among those risks is the legal battle with Epic Games, the maker of the popular video game Fortnite, where Cook faced questioning from a judge last month.
Last year, Apple removed Fortnite from the App Store, saying the game violated its software distribution platform guidelines.
Epic Games responded with a lawsuit within hours, accusing Apple of anti-competitive behaviour.
Apple subsequently filed counterclaims and responses seeking damages for Epic Games’ breach of contract.
And the growing regulatory scrutiny around the world may hinder the company’s access to this market value.
The European Commission said in April that Apple had abused its dominant position in distributing music-streaming apps through its App Store.
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