Apple, says Bank of America/Merrill Lynch analyst Wamsi Mohan, has a lot of room to grow.
Over the weekend I got my hands on the 28-page report Merrill Lynch Apple analyst Wamsi Mohan sent to clients Friday. It’s an impressive piece of work, focused on what he calls the “shadow TAM [total addressable market]”—the opportunities Apple has to make billions in markets it has not yet entered.
In 2016, according to Mohan, Apple accounted for nearly 10% of global consumer spending in technology: $218 billion out of a total $2.8 trillion worldwide.
That’s astonishing enough. But there’s more for the taking, according to Mohan, from two large baskets:
- The $345 billion TAM in markets it’s already in: smartphones, tablets, wearables, PCs, services, etc.
- The $295 billion TAM in markets it hasn’t entered: TV sets, TV shows, video games, etc. (Not included: heath and cars.)
There’s billions to be had, of course, by growing market share in the first basket. But Wamsi estimates there’s more to be made—$100 billion or so— that by grabbing low-hanging fruit from the second basket.
Below: A cool pie chart and an awesome spreadsheet.
Click to enlarge. Not seeing? Try the website.
Maintain Buy, raise price target to $180 from $155.