Apple (AAPL -2.05%) looks like it's well on its way to meeting Tim Cook's goal, set out in early 2017, to double its services revenue by this year. The company's services revenue was $24.3 billion in 2016. Through the first half of fiscal 2020, services revenue totaled $26.1 billion.

Apple's services revenue growth has been driven largely by continued growth in its installed base and increased penetration of digital subscriptions. Apple introduced several big new services last year -- News+, Arcade, TV+, and the Apple Card -- but those are still in the relatively early stages. Between continued services product rollouts and increased adoption, Evercore ISI analyst Amit Daryanani thinks Apple's services revenue can reach $100 billion by 2024.

Daryanani has laid out a highly optimistic case for Apple in the past, but $100 billion in services revenue by 2024 doesn't seem entirely out of the question.

The Apple iPhone 11 in six colors.

Image source: Apple

Maintaining momentum

Apple grew its services revenue over 20% per year through 2018, but that rate slowed to 16.5% in fiscal 2019. Services revenue grew 16.6% in the first half of fiscal 2020.

In order for Apple to reach $100 billion in services revenue by 2024, it will need to maintain its current growth rate over the next four and a half years. That will become increasingly challenging as the revenue base grows larger -- something Apple investors are very familiar with.

The good news is that Apple's newest services are still in their relative infancy. Apple hasn't released any official numbers for those services, but reports indicate 3.1 million Apple Card cardholders; Apple TV+ has around 10 million subscribers (on free trials); and Apple Arcade is predicted to reach 12 million subscribers by year end. There's still a lot of meat left on those bones.

Apple can and should do more to promote those new services. Apple Card could be particularly strong this year in conjunction with Apple Pay, as contactless payments increase in utility as a response to COVID-19. Increasing the penetration rate of its newer services would help Apple maintain momentum in services revenue growth.

New opportunities

Most of Apple's services are consumer-facing, but Daryanani also sees an opportunity for Apple to offer services that are more business-facing. 

He thinks the growth of Apple Watch and its health-related applications opens the door for health-related services. Electronic medical records, health-related apps, and partnerships with insurance and healthcare companies could all be sources of revenue for Apple. The analyst thinks the industry could produce $11 billion to $28 billion per year for Apple.

Meanwhile, the increasing popularity of the iPhone and iPad in enterprises could create an opportunity for Apple to introduce enterprise cloud solutions. iCloud is already a major source of revenue for Apple, but offering cloud storage and computing capabilities specifically designed for enterprise applications on Apple devices could be even more lucrative. Daryanani says about 12% of iPhone sales go to enterprise customers, which makes the installed base large enough to make enterprise cloud services a compelling opportunity.

Finally, there's an opportunity for Apple to expand its advertising products. It currently offers search ads in the App Store and display ads in its News app. There's room to expand the reach of Apple ads, and Daryanani thinks it could produce an extra $2 billion or $3 billion in annual revenue. In the push to $100 billion, every billion counts.

If Apple continues to expand its services business with new products that provide new utility and leverage its large installed base across multiple devices, it could hit $100 billion in services revenue in 2024. That could have a considerable impact on the FAANG stock's bottom line, considering that services generate much higher margins than physical products.