Betting against Apple? Not so fast: Ex-CEO Sculley

John Sculley is bullish on his former company.

The former CEO of Apple told CNBC on Tuesday he believes the giant tech company will rebound, but only if it masters mobile payments. Sculley's comments come as Apple shares were seeing their worst trading session in weeks, fresh off lackluster iPhone sales numbers that disappointed Wall Street analysts.

Its Passbook app, coupled with new beacon technology installed in stores, can help revolutionize mobile payments the way iTunes changed media consumption, Sculley said.

The app, which holds coupons, gift cards and tickets for movies and travel, comes with new iPhones and those with the latest software upgrades. Sculley believes the app can provide a framework for mobile payments. He said Passbook already has more than 600 million potential users, more accounts than offered by PayPal and Amazon combined.

Adam Jeffery | CNBC

John Sculley

Sculley called the mobile payment play a "blowup opportunity."

(Read more: Cramer: Apple's 'big schism')

"The real story ... [is]: Is Tim Cook still confirmed that they're going to have some big product announcements this year?" Sculley said on "Squawk on the Street." "The one I'm watching for is mobile payments, because that's where I think Apple could get a huge strategic advantage over PayPal, even Amazon."

Apple shares plunged more than 7 percent by midday Tuesday. But activist investor Carl Icahn bought more Apple shares as the stock plunged,

(Read more: Icahn: Apple buyback even more compelling now)

Sculley said investors should no longer treat Apple as a growth company because of its size.

What's more, the market has yet to see the full effect of Apple's blockbuster distribution deal with China Mobile, which opens iPhones to the world's largest wireless network, Sculley said. Apple should also see strong growth in India, he said.

"Apple doesn't trade like a growth stock," Sculley said. "It trade eight times cash. China Mobile is still a story that has yet to unfold."

Absent its former growth rates, Apple has to rely on bankable products or innovations to remain a strong investment, Sculley said, adding that mobile payments have more potential than any type of hardware development, such as an iWatch.

"I'll bet you that Apple recovers, and I bet you it goes way beyond where it's been once the end of 2014 is here," Sculley said.

—By CNBC's Jeff Morganteen. Follow him on Twitter at @jmorganteen and get the latest stories from "Squawk on the Street."