For the fiscal year that ended at the end of September, Apple (NASDAQ: AAPL) reported revenue just shy of $229 billion. While this was nearly $14 billion more than it generated in its prior fiscal year, it was about $4.5 billion shy of the all-time record it put up during fiscal year 2015.
During the current fiscal year, analysts expect Apple to enjoy nearly 20% revenue growth to achieve a new all-time record of about $274 billion.
Though fiscal year 2018 promises to be a great year for Apple, growth stock investors are more interested in a company with multiple years of solid growth ahead of it.
Is Apple that kind of stock? Well, here are two of Apple's biggest long-term growth opportunities.
Image source: Apple.
1. iPhone
It's no secret that the smartphone market, Apple's largest market by far, is maturing. The iPhone accounted for nearly 55% of Apple's revenue in the most recent quarter. Industrywide smartphone unit shipment rates are bound to slow, and Apple isn't immune to that broader trend.
However, there are two ways that Apple can work to offset that trend.
The first is by working to increase the average selling prices of its iPhones and the second is to try to gain smartphone market share at the expense of other vendors.
Increasing average selling prices is a tricky proposition: The company could jack up the prices on its phones across the board, but that would likely come with a corresponding decrease in demand.
It would be more accurate, then, to say that Apple's goal is to increase average selling prices without impacting unit shipments.
Image source: Apple.
It can do that by being more aggressive in building out a portfolio of products that addresses a wider range of price points as it started doing with the iPhone 6 series (Apple introduced a standard-sized iPhone and a Plus-size iPhone at a higher price point) and continued with this year's trio of iPhones (an even higher-end and pricier iPhone X above the iPhone 8 Plus was added to the lineup).
The products that come in at higher price points need to have additional features compelling enough that customers are willing to pay more for them -- that's the real trick.
I think over time Apple can continue to expand the high end of the iPhone price range, which could have the effect of slowly but surely improving the capabilities of its best iPhones relative to the lower-cost models.
As far as growing unit shipments, Apple can do this through a combination of adding targeted products at the lower end of the iPhone product stack (the iPhone SE comes to mind) to increase its share of the lower end of the market while also building more compelling products at the high end.