Where's the iGrowth, Apple?

Apple's (AAPL) quarterly results on Monday afternoon didn't exactly set the world on fire. Analysts gravitated to the bottom line where net income slipped 9 percent, though aggressive share buybacks over the past year softened the blow on a per-share basis to just a 5 percent slide.

The holiday quarter isn't going to be whole lot better. Going with the midpoints of Apple's guidance for revenue and gross margin, we're eyeing gross profit moving from $21.06 billion during last year's fiscal first quarter to $20.91 billion during the seasonally potent winter sales period this time around.

The market's going to fret about a lot of things. Contracting margins and lower selling prices dominate the headlines about Apple. However, the company has an even bigger -- and simpler -- problem at the moment: It isn't growing at the pace that initially attracted growth stock investors during the glory days when it introduced the iPod, iPhone, and iPad.

The Top Line is the Bottom Line

Apple's net sales in its latest quarter -- the consumer tech giant's fiscal fourth quarter since its financial year ends in September -- inched a mere 4.2 percent higher. This has to be particularly shocking to investors believing that the class act of Cupertino is growing a lot faster.
It gets worse.

Apple didn't even have the iPad mini during last year's fiscal fourth quarter; it didn't introduce the smaller, cheaper tablet until November, more than a month after that quarter ended. Apple isn't revealing how many millions of iPad mini devices it sold during these last three months, but overall growth would have probably declined during the quarter if it wasn't for the iPad mini.

%VIRTUAL-article-sponsoredlinks%The iPhone has never been hotter. Net sales climbed 17 percent during the period, fueled by the 9 million iPhone 5s and iPhone 5c devices it sold the weekend that those smartphones hit the market toward the end of the reporting period. However, we're also seeing iPad, Mac, and iPod revenue plunging 13 percent, 15 percent, and 30 percent respectively over the past period.

There are some good (though unfortunate) explanations for this. The iPad mini lowered the average selling price of Apple's tablets. Mac sales have stalled alongside PC sales in general as consumers flock to smartphones and tablets over desktops and laptops. The iPod's been fading for more than two years now that portable media players essentially live within smartphones and tablets.

And even China proved to be a disappointment. Revenue in the world's most populous nation climbed just 5.6 percent. This is surprising since Apple introduced the iPhone 5c and iPhone 5s in China during the quarter. It waited three months after the stateside release of the iPhone 5 before introducing the bar-raising smartphone to China in December of 2012. In other words, China had a new phone this quarter instead of the tail-end of the iPhone 4S a year earlier. And it still didn't make much of a difference.

Things Can Always Get Worse

Between last month's new iPhones and this month's iPad refresh one would think that this would be a monster quarter for Apple. This is the holiday shopping season, and Apple products typically weigh heavy on Santa's sleigh.

However, Apple on Monday afternoon announced that it is targeting between $55 billion and $58 billion in net sales for this seasonally potent quarter. Apple rang up $54.5 billion in net sales during last year's holiday period. At the midpoint of Apple's guidance we're looking at growth to decelerate to 3.7 percent.

After several years of consistent double-digit growth on the top line, this is shaping up to be Apple's third consecutive quarter of single-digit growth. Yes, things could always be worse. Apple's business could be going the wrong way. However, that's already happening for all of Apple's major product categories outside of the iPhone. The smartphone has become Apple's workhorse, growing from 46 percent of Apple's net sales to 52 percent over the past year.

There has never been a more important time for Apple to shake things up, and innovate its way out of this slow-growth rut.

What happened to that blazing speed that Apple used to show off every three months? The market's waxing nostalgic about the golden days of iGrowth.

Motley Fool contributor Rick Munarriz has no position in any stocks mentioned. The Motley Fool recommends Apple. The Motley Fool owns shares of Apple. Try any of our newsletter services free for 30 days.