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Are You Ready for the New Apple Inc. (AAPL) Stock?

Apple Inc. (AAPL)Apple Inc. (NASDAQ:AAPL) is about to transform again. The results of this chrysalis-to-butterfly moment won’t be as pretty and profitable as the current model, but the new Apple Inc. (NASDAQ:AAPL) might be a great play for income investors.

The company has gone through a couple of drastic changes in recent memory. More than 15 years ago it leveraged a $150 million cash infusion from Microsoft Corporation (NASDAQ:MSFT), of all sources, to step away from the brink of bankruptcy and become a healthy computer systems builder again — with a side of high-quality audio players and a brand new retail store network, of course.

The next radical move came when the original iPhone made it cool to have a smartphone. The device was not only fashionable and functional, but also extremely profitable. The resulting boom turned Apple Inc. (NASDAQ:AAPL) into the world’s most valuable business, and was fantastic news for shareholders.

Apple Inc. (NASDAQ:AAPL)’s market cap surpassed Microsoft Corporation (NASDAQ:MSFT)’s in 2010. The very idea would have been laughable in 1997, when that $150 million olive branch was extended.

AAPL Market Cap Chart

AAPL Market Cap data by YCharts.

But now we’re looking at another huge change. This time, it’s not driven by a fantastic Apple Inc. (NASDAQ:AAPL) product or visionary leadership. This time, market realities are making their mark on Apple Inc. (NASDAQ:AAPL) rather than the other way around.

Take a look at the two charts below. They cover the last three and a half years of Apple’s financial growth, or roughly the iPad era. You’ll see the most dramatic part of Apple’s rise to power, followed by a clear peak and an inevitable decline.

Data from S&P Capital IQ.

The first chart shows you how Apple’s financial growth has reversed in recent quarters. In four of the last five reporting periods — including the report filed this week — Apple actually reported shrinking cash flows. The last two quarters also included falling earnings, and top-line revenue growth has stalled to just 1% year over year.

Apple is not hitting a brick wall here, but the days of fantastic growth are over.

The second chart smooths out seasonal effects by looking at trailing-12-month numbers. Again, the overall trends are pretty obvious. Apple delivered its finest hour of growth across the board in 2011 and early 2012, fueled by the last iPads and iPhones touched by rainmaker Steve Jobs. The growth engine has been stalling ever since.

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