Apple’s (NASDAQ: AAPL) stock has risen almost 460 percent in the last five years, confounding bears who said the company’s heyday was over. Between fiscal 2016 and 2020, the computer giant’s yearly sales increased from $215.6 billion to $274.5 billion, while its annual net income increased from $45.7 billion to $57.4 billion.
But, over the next five years, will Apple be able to continue its momentum? Let’s take a look at its long-term strategy to find out.
What’s up in the next two years?
Analysts predict that Apple’s sales will increase by 21% in fiscal 2021 and then another 4% in fiscal 2022. New hardware devices and the expansion of its services ecosystem will account for the majority of that increase.
This year, Apple’s first family of 5G smartphones, the iPhone 12, is anticipated to launch a new round of upgrades. According to recent projections from its suppliers, it may ship 230 million iPhones in 2021, representing a 14 percent increase over 2020 and the strongest year for the flagship handset since 2016.
Strong iPhone shipments, which generated half of Apple’s revenue in 2020, should tether more users to the company’s growing services ecosystem, which includes the App Store, Apple Music, Apple TV+ Last year, such services accounted for 20% of Apple’s income, and the company just exceeded 600 million paying customers across the board.
Apple will continue to lock in its consumers by using the power of its hardware business and closed environment, perhaps leading to additional disputes with firms such as Spotify, Netflix, and Amazon. Those battles might be costly, but Apple still has over $196 billion in cash and marketable securities, so it can afford to take on those well-entrenched competitors.
Apple is expected to release new versions of the Mac, iPad, Watch, and AirPods every year, according to the rest of its hardware business. Apple’s upcoming Macs will use its own ARM-based CPUs rather than Intel’s x86 CPUs, and the company may put even more of its first-party chips into its other gadgets to tighten up its supply chain, distinguish its products, and increase margins.
The company’s AR division is growing.
According to The Information, Apple is working on an augmented reality (AR) headgear that will be released in 2022. In 2023, it may release a lightweight pair of AR glasses to follow up on that gadget.
The specifics on these long-rumored gadgets are scant, but they may help Apple compete in the embryonic virtual and augmented reality industries with Microsoft (NASDAQ: MSFT) and Facebook (NASDAQ: FB). Microsoft’s HoloLens is currently an expensive development gadget, but Facebook’s Oculus VR company is allegedly planning to break into the AR market with lightweight glasses between 2023 and 2025.
If the “Apple Glasses” are a hit, they will join the iPhone, Apple Watch, AirPods, and other Apple gadgets in locking consumers in to the company’s ever-expanding ecosystem. It would also lessen Apple’s reliance on the iPhone, perhaps paving the way for the company’s “Apple Car” introduction some years later.
Before 2025, Apple is anticipated to join the car industry with the Apple Car. This would provide the corporation with a significant new revenue stream as well as diversify the company’s operations.
Is Apple a long-term investment that pays off?
Apple will continue to reward investors as long as it innovates. The smartphone market has gotten increasingly competitive, but Apple has remained a significant participant. Apple has yet to disappoint as the move to 5G networks has given a significant opportunity for the firm to generate development in its iPhone business.
Apple’s services sector is expanding, and the company is looking for new possibilities. The firm, for example, is interested in augmented reality and virtual reality.
Where will Apple stock be in the long run?
It’s difficult, if not impossible, to predict where Apple’s stock will be in 2025. However, there’s a good possibility Apple’s stock will double in price in the next 4–5 years.
Apple stock demand will rise as investors want consistent dividends as the company expands into other sectors such as producing electric automobiles. Apple invests its profits not just in expanding and diversifying its company, but also in increasing the value of its shares. The firm has a lengthy history of repurchasing shares and has given investors hundreds of billions of dollars.
Apple’s share repurchase program has a secondary consequence in that it makes Apple shares scarce, therefore increasing their value. The firm has shown no signs of stopping the buybacks, implying that Apple stock will continue to rise as supply falls and demand rises.