It refers to the total potential market demand for a specific product or service.
For example, if a company develops a new smartphone, the TAM would be the total number of people worldwide who use or have the potential to use smartphones.
To calculate the TAM:
Identify the target market for the product or service.
Determine the total number of potential customers within that market.
Estimate the average revenue or spending per customer.
Multiply the number of potential customers by the average revenue per customer to get the TAM.
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