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What Could Save Apple Inc. (AAPL)

Analysts expect Apple Inc. (NASDAQ:AAPL) to report revenue of $35.02 billion for the company’s third quarter, according to Fortune‘s preliminary survey. As Fortune‘s Philip Elmer-DeWitt points out, that’s the exact same number Apple Inc. (NASDAQ:AAPL) reported in the year-ago quarter. Is zero growth Apple Inc. (NASDAQ:AAPL)’s new norm? Or, even worse, is decline Apple Inc. (NASDAQ:AAPL)’s future? Possibly — but there are still a few potential growth drivers left for Cupertino’s tech giant.

Apple Inc. (AAPL), Inc. (AMZN), Barnes & Noble Inc. (BKS)

1. China Mobile Ltd. (ADR) (NYSE:CHL)
As the smartphone and tablet market begins to mature and become more competitive, Apple Inc. (NASDAQ:AAPL) will certainly have trouble growing its two highest-revenue product lines. But there still remains one substantial growth driver for Apple Inc. (NASDAQ:AAPL) within the smartphone industry: China Mobile Ltd. (ADR) (NYSE:CHL). As China’s largest mobile carrier, it dwarfs its competitors with 735 million mobile subscribers, compared to China Unicom (Hong Kong) Limited (ADR) (NYSE:CHU)‘s 258 million, and China Telecom Corporation Limited (ADR) (NYSE:CHA)‘s 172 million.

As Morgan Stanley’s Katy Huberty noted after a recent visit to Hong Kong and Taiwan, CEO Cook and company may strike a deal and launch phones by year end. The opportunity? She says that a China Mobile Ltd. (ADR) (NYSE:CHL) deal, combined with a cheaper iPhone, could potentially triple Apple’s addressable smartphone market in China.

Source: Cult of Mac.

2. New categories
Raymond James analyst Tavis McCourt, who has issued a $600 price target for Apple stock, believes the stock is a strong buy. Though he does acknowledge China Mobile as a growth opportunity for Apple, he sees the company’s major opportunity is in the expansion of iOS into televisions, automobiles, and other new areas.

Indeed, iOS in automobiles is already scheduled to debut in 2014.

iOS in the Car. Source:

Though it’s just a small step, it’s definitely a strong move in a direction that could open many opportunities for Apple.

Rumors of an Apple television set have mostly dwindled, but it remains a definite possibility.

What about wearables? At All Things Digital’s D11 conference, Apple CEO Tim Cook sounded almost certain that Apple would eventually move into this category:

I think wearables is incredibly interesting, and I think it could be a profound area for technology. … I think there’s lots of things to solve in this space, but it’s an area where it’s ripe for exploration, it’s ripe for us all getting excited about; I think there will be tons of companies playing in this.

And, answering Walt Mossberg’s question as to whether or not Apple would be one of them, Cook said, “I don’t want to answer that one, but, you know, I see it as something — as another very key branch of the tree.”

Does Apple need saving?
It’s tough to gauge to what extent new categories and China Mobile will help boost Apple’s bottom line. But, fortunately for investors, Apple doesn’t need growth to reward investors. With a generous share repurchase program and a nice dividend yield, any upside would be a nice bonus for investors at today’s price for Apple stock.

The article 2 Growth Drivers That Could Save Apple originally appeared on

Fool contributor Daniel Sparks has no position in any stocks mentioned. The Motley Fool recommends Apple. The Motley Fool owns shares of Apple and China Mobile.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

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