For a company that made $260 billion in fiscal 2019, $10 billion might not sound like much, but with product sales that declined by more than 5% last year, Apple (NASDAQ:AAPL) could be looking for additional growth wherever it can get it.

The most obvious and oft-reported growth engines for the company are wearables and services. Apple reported wearables -- which includes AirPods, Apple Watch, and Beats products -- generated well over 50% growth in Apple's fiscal Q4, setting records in the process. Services is another area that has been getting attention from Apple in recent years. The segment grew 25% year over year and now accounts for 18% of the company's total revenue.

Yet Apple has another big revenue opportunity that most investors haven't even considered -- digital advertising.

Woman watching multiple projections of digital advertising.

Image source: Getty Images.

In plain sight

Apple has the potential to become a major force in digital advertising, according to J.P. Morgan analyst Samik Chatterjee. The analyst maintained his overweight (buy) rating on the stock and increased Apple's price target to $290 -- about 10% higher than Thursday's close. Chatterjee also suggested that while investors are focused on services, advertising is another sizable opportunity "hidden in plain sight and under-appreciated by most." He points to the "secular migration of advertising dollars to mobile platforms [and] the large installed base of close to 1 billion iPhone users."

Apple has counted more than 1.4 billion active devices in the wild, which gives the company access to as much as 18% of the population of the planet -- though households with multiple Apple products make exact figures a bit murkier. With an installed base of that size, it wouldn't take much to move the needle.

He estimates that Apple banks about $2 billion annually from advertising but has plenty of opportunity to increase its ad load, expanding its digital ad revenue to $11 billion by 2025. By simply "adopting additional advertisements" related to search and "monetiz[ing] advertising opportunities on Apple TV," the company could generate a meaningful amount of ad revenue in just a few years.

Chatterjee is hardly the first to think so. Late last year, Bernstein analyst Toni Sacconaghi suggested that over the next several years, Apple could generate "several billion" dollars from advertising, noting that the business is "rapidly approaching an inflection point." Success in advertising could not only bolster the success of Apple's services business but also help expand its margins.

It's not just Apple

Apple isn't the only company working to line its coffers with advertising riches. Fellow tech giant Amazon (NASDAQ:AMZN) began significantly increasing its focus on digital advertising in late 2017, and by early 2018, it had generated several successive quarters of triple-digit growth in the segment. This resulted in more than $10 billion from the company's "other" revenue for the fiscal year, which Amazon said "primarily includes sales of advertising services."

By late last year, this was enough to push Amazon up the ranks of digital advertisers to take up a solid third-place position -- behind Alphabet's (NASDAQ:GOOGL) (NASDAQ:GOOG) Google and Facebook (NASDAQ:FB), which hold the No. 1 and No. 2 spots, respectively. Amazon is expected to further solidify its position in 2019.

A picture of two women with their arms around each other being photographed in a crowded room -- being shown on Apple TV, Mac, iPad, and iPhone.

Jennifer Aniston and Reese Witherspoon in a scene from Apple TV+ original program The Morning Show. Image source: Apple.

A multifaceted opportunity

There are a number of different ways Apple could choose to expand its advertising opportunity. Much like the strategy that Disney- (NYSE:DIS) controlled Hulu has taken, Apple could eventually offer both a premium tier and an ad-supported tier for Apple TV+. The company could take a page from global streaming music leader Spotify (NYSE:SPOT) by offering a free ad-supported music service to augment its paid subscription. Digital services like Apple Arcade and Apple News+ could provide other outlets for the company's advertising ambitions. Apple could offer a strategically priced bundle that could help advance an ad-supported offering. Disney recently used a similar maneuver by offering Disney+, ESPN+, and Hulu for $12.99 -- saving users $5 per month. Free services like Maps could also be leveraged.

While it's true Apple wouldn't want to alienate its paying customers with too many ads, this illustrates just how many opportunities the company has at its disposal if it really decides to ramp up its advertising business. If the iPhone maker were to pull just a few of these levers, Apple would quickly move up the ranks and become a digital advertising powerhouse.