Apple (NASDAQ:AAPL) is an incredibly large and profitable business. According to analyst estimates, the company is set to bring in nearly $264 billion in revenue, and it generated about $70.3 billion in operating profit during its fiscal year 2018. 

If Apple achieves those figures, fiscal year 2018 will represent a new revenue record for the company, although it'll still be slightly shy of the $71.2 billion of the operating income it generated during its fiscal year 2015. (Apple's operating expenses have grown dramatically since then.)

AAPL Research and Development Expense (TTM) Chart

AAPL Research and Development Expense (TTM) data by YCharts.

As the above chart shows, Apple has dramatically increased its research and development expenses over the years as it invests in future products. Those future products are, of course, intended to help deliver revenue and profit growth for the company over the longer term. 

To that end, let's go over three growth opportunities for Apple that investors should keep a close eye on.

1. Apple Music

Apple announced its own streaming music service, called Apple Music, on June 8, 2015, and launched it 22 days later on June 30, 2015. The service has been a success for the company and seems to be continuing to grow at a rapid rate. For example, on the company's July 31, 2018, earnings conference call, CEO Tim Cook said that Apple Music "grew by over 50% on a year-over-year basis." 

To put the success of this business into perspective, Digital Music News reported on July 5, 2018, that both Apple Music and Spotify (NYSE:SPOT) -- which has been around since 2006 -- have "more than 20 million subscribers in America, with Apple now a hair ahead."

The report also claimed that Apple Music's growth rate in the United States was "far stronger" than Spotify's.  

Of course, these services are offered outside of the U.S. as well, but the point is that Apple Music is already quite popular, and it's continuing to gain momentum. Apple doesn't break out Apple Music revenue individually, but it's one component of Apple's large and fast-growing services business, which generated $9.55 billion in sales last quarter, growing 31% year over year and, in the words of Apple CEO Tim Cook, delivering "all-time record revenue."

Apple Music seems like it should be a solid contributor to the growth of its services business in the years ahead.

2. Apple Watch

A product category that's proven quite successful for Apple has been the Apple Watch. According to market researchers with IDC, Apple was the top wearables vendor by volume in 2017, shipping 17.7 million units and capturing 15.3% market share. (It's worth noting that IDC's definition of wearables isn't limited to smartwatches, so this doesn't reflect Apple's share of the smartwatch market.)

On the company's most recent earnings call, Cook said that "Apple Watch delivered record June quarter performance with growth in the mid-40% range."

Moreover, it's also worth keeping in mind that Apple just launched a new version of its Apple Watch, known as the Apple Watch Series 4, that has a broad set of improvements over the prior-generation Apple Watch Series 3. For the latest entry in the Apple Watch line, per TF Securities analyst Ming-Chi Kuo, "Apple Watch Series 4 demand is much better than expected," and the analyst even boosted his 2018 Apple Watch shipment estimates from 18 million units to between 18.5 million and 19.5 million units.

This product category is clearly growing quickly for the company. Although, over time, I'd expect Apple Watch shipments to slow down as the installed base becomes larger and the market more saturated, there seems to be good amount of room for this product category to run in the coming years.

3. Audio products

Over the last several years, Apple seems to have gotten quite serious about audio products. In fact, it paid $3 billion for both Beats Music and Beats Electronics -- by far the company's biggest buy. Since then, the company has not only continued to offer Beats-branded headphones for sale, but it launched AirPods wireless earbuds, which have proven to be quite popular. 

In fact, they're so popular that on Apple's July 31 earnings call, CFO Luca Maestri said that "AirPods continue to be a runaway success and we've been selling them as fast as we can make them since their launch a year-and-a-half ago." 

A woman with AirPods in her ears.

Image source: Apple.

According to a report from Bloomberg back in June, Apple is "working on new AirPods with noise-cancellation and water resistance," and the company "is trying to increase the range that AirPods can work away from an iPhone or an iPad." 

In fact, it seems that Apple believes so much in the AirPods growth story that it has even "internally discussed adding biometric sensors to future AirPods, like a heart-rate monitor, to expand its health-related hardware offerings beyond the Apple Watch," per Bloomberg.

Beyond iterating on AirPods, Bloomberg also reports that Apple is working on a pair of over-ear headphones. These, Bloomberg says, "will use Apple branding and be a higher-end alternative to the company's Beats line."

Apple's audio ambitions also go beyond portable audio products. Earlier this year, Apple released its first smart speaker known as the HomePod. While the device is both pricey and far from perfect, the product managed to capture -- at least if you believe Strategy Analytics -- a 70% share of the market for smart speakers priced at $200 and up and even managed to "top the market value rankings with 16% share of wholesale revenues" in the second quarter of 2018.

All told, Apple seems to be keen to invest in building out a range of audio products to complement its thriving device ecosystem.

Ashraf Eassa has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Apple. The Motley Fool has the following options: long January 2020 $150 calls on Apple and short January 2020 $155 calls on Apple. The Motley Fool has a disclosure policy.