“One thing that I think confuses investors about Apple (AAPL) is that it’s difficult to envision a company, any company, that can possibly be worth $1 trillion, let alone $2 trillion,” Richard Bloch writes for Seeking Alpha. “Here’s what I consider to be a fairly conservative scenario of how Apple gets to $2 trillion.”

“I decided to assume that iPhone and iPad sales will grow, but at a gradually reduced rate over the next four years. And I assumed the introduction of the iNBT (Next Big Thing). That could take the form of some TV product, or something else we don’t even know about yet – and that iNBT sales will start growing at a rate similar to the iPhone and iPad when they were launched,” Bloch writes. “So here are my projected revenues.”

aapl_revenues_by_product

Bloch writes, “Apple’s shares outstanding have been rising over recent years. I expect that to continue, probably surpassing 1 billion shares by 2016. But even assuming a rising share count, here’s how I expect trailing 12-month earnings per share to grow based on my revenue and margin assumptions. Although it may look overly optimistic, I’m actually projecting slower growth.”

aapl_eps_projected

Bloch writes, “I’m going to make yet another assumption that’s probably way too conservative. That the market gives AAPL a trailing PE ratio of 12. Even at that PE, which I would consider somewhat low. The stock price gets to $2,000 per share by 2016 and the market cap tops $2 trillion.”

aapl_price_projected

Much more in the full article here.