Apple Pay will generate revenues of US$263m this year and that figure will increase to $3.3bn by the end of 2017, billionaire investor Carl Icahn has forecast. In an open letter to Apple CEO Tim Cook, he also states that the company is “undervalued” and that now is the “time for a much larger buyback”.

“After an insignificant financial contribution in full year 2015, we expect Apple Pay to gain acceptance at more retailers and for Apple to expand the service internationally,” Icahn writes.

“Our forecasts for revenues (also equivalent to gross margins as the variable costs are de minimis) are $263m in full year 2015, $1.2bn in full year 2016, and $3.3bn in full year 2017.”

Icahn values Apple shares at $240, well above the $130 figure the shares were trading for today, and believes that Apple is also poised to enter and dominate two new categories: television by next year and cars by 2020.

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