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TAM, or Total Addressable Market, represents the total revenue opportunity available for a product or service within a specific market. It denotes the maximum potential sales if every possible customer within the market were to buy the product or service.
For example, in the smartphone market, if there are 1 billion potential customers globally and the average selling price of a smartphone is $300, then the TAM would be $300 billion. Understanding TAM helps businesses assess the potential size of their market and devise strategies to maximize market share.
