How Can Apple Regain Its ‘Mojo’?

Wall Street is in the middle of a rousing comeback, touching levels not seen in the Dow since October 2007.

But shares of Apple haven’t gained in lockstep with the broader market. In fact, shares of Apple continue to hover at or around $450, which is substantially lower than the record $700 share price Apple enjoyed right after the iPhone 5 was unveiled in September.

“The big question we get from investors is whether the greatest turnaround and growth story of the past decade is over?” asked Sterne Agee’s Shaw Wu in a note to investors this morning.

Although Wu doesn’t believe Apple is done growing its empire, the analyst thinks the company’s mojo is lost. And there’s only one way to get it back: expand the scope of its most popular products.

“We believe AAPL is leaving money on the table by not participating in larger touchscreen form factors,” Wu said Tuesday. “But more importantly, we believe AAPL needs to reclaim high-end leadership as that is what brand is about. Sure, iOS, iTunes and the App Store are great, but it is clear that many customers want larger screens.”

“In many markets, the 4.8- inch (Samsung Galaxy S III) to 5.55-inch (Galaxy Note II) form factors are the new high- end of the market where the iPhone 5 is viewed as mid-range but with a high-end price.”

Although rumors have persisted for months that Apple will do everything from release a cheaper, entry-level iPhone to a larger-screen “phablet,” there is no confirmation of either rumored project as of this writing.

So stay tuned.