Apple Inc. (AAPL), China Mobile Ltd. (ADR) (CHL): You’re Still Forgetting This Growth Driver

Apple Inc. (NASDAQ:AAPL) has been struggling to prove that it still has growth ahead of it. In order to put that question to rest, it either needs to bring out a new revolutionary product or find a new market with lots of customers. On the latter count, China is a market close enough to touch that Apple Inc. (NASDAQ:AAPL) hasn’t been able to fully tap yet.

The Drop

It seems like the big drop in Apple Inc. (NASDAQ:AAPL) shares has been going on since the company initiated a dividend. A push by a dissident shareholder recently led the company to hike the dividend by 15% and promise to return more money to shareholders via massive share buybacks. While these are both shareholder friendly acts, they are what mature companies do.

It is exactly that image that has caused the company’s shares to falter. The company is increasingly looking like a consumer products company, selling legacy devices and not much more. Part of the problem is Apple Inc. (NASDAQ:AAPL)’s penchant for keeping everything it builds in-house, unlike a Google Inc (NASDAQ:GOOG) which shares liberally and benefits from the growth of its partners.

However, the company’s own success is clearly part of the problem, too. After Steve Jobs returned to head the company, a series of truly industry changing devices was brought out. The iPod started it all, followed by the iPhone, and more recently the iPad. While there have been a few flops along the way, such as Apple TV, the winners have more than made up for the losers.

A Hard Act to Follow

Essentially, Apple Inc. (NASDAQ:AAPL)’s own success set the bar high. With a less than inspiring iWatch concept being run around, innovation seems likely to be a weak spot in the near term. That means that Apple Inc. (NASDAQ:AAPL) needs to sell more gear to keep its top and bottom lines growing. Hard to do in the predominantly mature markets it serves.

The one market that seems tailor made for Apple to continue supporting torrid growth is China. That country, however, isn’t the easiest market to enter. For example, the largest cell phone company is China Mobile Ltd. (ADR) (NYSE:CHL). It is, basically, controlled by the Chinese government.

It has around 600 million customers and controls almost two-thirds of the cell market in country. That’s a huge opportunity, but one that Apple hasn’t been able to tap. And China’s CCTV, a government owned broadcaster, having accused Apple of treating Chinese customers “differently” than it treats customers in other countries doesn’t make a deal look any more likely. Apple’s apology doesn’t change much.