Sculley said a fully developed iWatch could bring Apple back into the ranks of innovation leaders, as long as it's more than just a "cool piece of hardware." Similar wearable tech products from Samsung and Sony failed to "wow" consumers, he added.  A potential wearable device won't move the earnings needle that much, and experts fear profit margins dropping "in a heartbeat" in Apple's mobile handset business, Reitzes said. After reaching a high of $575 in December, Apple's share prices seem stuck in a range, he added.  "Everything that Apple does has to be a little more meticulous and a little more careful," Reitzes said.  Read MoreApple looks an awful lot like Microsoft: Pro  Apple could offer something different with its rumored "Healthbook" app, which tracks everything from blood sugar to daily physical activity, Sculley said. Much more potential lies in mobile payments, Sculley said. Reitzes added that using the base of iPhone users to form a global mobile payments network can provide Apple with a lasting business model and revenue stream.  Apple has most of the parts needed to transform brick-and-mortar shopping with its one-touch payments and in-store beacons under development, Sculley said.  "I have been wondering when Apple would put the pieces together," Sculley said.  Sculley led Apple in the mid-1980s and helped remove Jobs from the company. In an interview with the Times of India last week, the former CEO said he regretted the decision to force Jobs from the company he founded.  —By CNBC's Jeff Morganteen. CNBC's Bruno J. Navarro contributed reporting to this article.
Apple needs to prove it can still make the disruptive innovations it did in the mobile phone business, former CEO John Sculley tells CNBC.