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How Apple Can Get Its Mojo Back

NEW YORK (TheStreet) -- Apple's (AAPL - Get Report) days as a growth company, and subsequently, a growth stock, are over. That's the reality. Now, let's move on to the iPhone maker's next era.

According to UBS analyst Steve Milunovich, who rates shares "buy" with a $625 price target, Apple may not grow at the speed of previous years, but it does have opportunities to do quite well for the company's shareholders. The recent deal with China Mobile (CHL), the potential for new product categories, and continued buy backs and dividend increases are still boost Apple's stock price.

On the company's fiscal first-quarter earnings call, CEO Timothy D. Cook said Apple will introduce some new new products. "I would just say, innovation is deeply embedded in everybody, and there's still so much of the world that is full of very complex products, etc," Cook said on the call. "We have zero issue coming up with things we want to do that we think we can disrupt in a major way. The challenge is always to focus to the very few that deserve all of our energy. And we've always done that, and we're continuing to do that."

Cook made potentially strong comments surrounding mobile payments, suggesting that Apple's next big product may indeed be a mobile payments offering, using iTunes and TouchID as the basis.

Apple's key product, the iPhone, is still selling exceptionally well, having sold 51 million iPhones in the most recent quarter. However, Milunovich notes revenue growth has plunged in the past four years.Revenue from grew 83% in 2011, but in 2014, it's expected to grow just 6% year over year. "However, we expect  iPhone unit increases to average about 10% in F2H as upgrade activity improves and emerging market activity, including 10mn phones through China Mobile, is strong," Milunovic wrote in the note.

The iPad, in contrast, which was introduced in 2010, saw a 3% rise in revenue in 2013, and a 5% unit rise, but moved higher in the-first quarter of 2014, seeing 14% growth during the quarter.

2014 may be a better year for Apple in terms of products, including the aforementioned mobile payments initiative. There is the potential for a larger screened iPhone, which may benefit China, particularly as the deal with China Mobile ramps up in the March quarter. "Phablets are cutting into tablet growth, not only in Asia but in Western countries," Milunovich penned in the note. He found that 40% of U.S. buyers would purchase a smartphone with a screen bigger than 5-inches, affectionately known as phablets. Phablet users also tend to use their tablet less, which could cut into tablet sales.

Last year, the iPad generated $32 billion in revenue for Apple.

For Apple to change perception about the company, it needs to introduce new products, not just a larger iPhone. Cook's comments about having "zero issue coming up with things we want to do" are indicative that the company is working hard on changing the perception Apple is now a mature company.

Ads such as the one below, talking about the next 30 years of the Mac, are aimed at changing that perception.

One new iDevice, at a time.

--Written by Chris Ciaccia in New York

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