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AAPL 2024 Price Target

|Includes: Apple Inc. (AAPL)

If Asia/China, India, South America, Africa and the Middle East's iPhone penetration mimic present day USA and Western Europe's you could easily see 150 additional iPhone sales per year from China alone. Currently, China has 800 million smartphone users. If Apple were able to capture 40% of the smartphone market in China this would produce 200 million iPhone upgrades per year assuming a two year upgrade cycle at present day levels. This doesn't account for any of the five other geographic regions nor any increase in the size of the smartphone market.

This would produce revenue of $309 billion in year 2024 holding all other product lines constant and without considering additional product lines (ex. Apple Watch, Apple Car, Apple Pay, Solar Farms, Apple Music, HomeKit, Health and Apple TV).

In the low end of the valuation range, with an assumed 5.5% annual compounded revenue growth rate average and a price to earnings ratio of 15, AAPL will be priced $366.55 for an average compounded growth rate of 13.9%. At the current price of $129 the total return would be 285% over the 8 year period.

If you assume AAPL will have an installed base of around one trillion in 2024 and that 25% of the installed base will buy an Apple Watch each year, this would create $125 billion in additional revenue assuming ASP of $500. Adding the $125 billion from the Apple Watch sales to the original $309 billion iPhones scenario gives you $435 billion.

If you assume that 2% of the United States GDP in 2024 will be transacted through a tokenization platform such as Apple pay and 50% of that market is controlled by Apple earning .0015% on each transaction this would create an additional $280 million in Revenue.

Can the iPad, Apple Car, Solar Farms, Apple Music, HomeKit, Health and Apple Tv make up the additional $130 billion needed to produce $565 billion in 2024 revenue?

At the high end of the valuation range, with an assumed 12% compounded average revenue growth rate and a price to earnings ratio of 20, AAPL will be priced at $665 for an average compounded growth rate of 22.75%. At the current price of $129 the total return would be 515% over the 8 year period.

Assumptions used in my calculation are that Apple is able to raise the dividend by 10% per year, buyback 4% each year in treasury stock and hold net profit margins at 22%.

Disclosure: I am/we are long AAPL.