Apple is having a harder time making money from mobile even as smartphone and tablet use continues to grow, with similar difficulties being faced by other traditional desktop companies such as Microsoft and Google.

This was one of the key takeaways from yesterday?s second-quarter results from Apple, which showed revenue was essentially flat while profits were down. Going forward, all eyes will be watching to see if Apple can reinvigorate its mobile strategy with a break-through innovative product such as it did with the iPhone and iPad.

?From a growth point of view for Apple, our key catalyst will always be new products and new services in existing categories that we are in and in new categories,? said Apple CEO Tim Cook during a conference call with analysts to discuss the results. ?In addition to this, we have opportunities in distribution in terms of expanding our retail stores, expanding our online store.

?We also have a market expansion opportunity with enterprise. I think we are at the very front-end of that.

?I don?t subscribe to the common feeling that the high-end smartphone market is at its peak. I don?t believe that, but we?ll see.?

Looking for innovation
Apple is facing the growing perception that it is losing its innovative edge in the mobile space.

Innovation in the mobile space is increasingly seen as coming from competitors such as Google and Samsung.

Industry watchers are looking to see if Apple can still drive innovation. This is particularly important in the mobile space, as it is still relatively young and quickly evolving as use grows.

However, while competitors such as Samsung have already introduced new smartphones this year, Apple?s iPhone 5 was released last fall. The iPad mini was also launched last fall, but there has not been a new product from Apple in the period since, which is a long time in the fast-paced mobile handset segment.

? I think a great new product will renew excitement,? said Harry Kargman, CEO of Kargo, New York . ?However, there is a limited window to bring that product to market.

?If Apple releases a new product that bombs, I think there will be a sense that Apple is on the decline,? he said.

?Given that Steve Jobs was such a product genius at bringing new, never-before-seen products to market, is an Apple post-Steve capable of delivering the kind of innovation that changes the world? We clearly see an upgrade path for iPhone, iPad and their laptop and desktop models, but what other innovation??

High-end drops off
One widely held belief is that the high-end market for smartphones is reaching a saturation point, which means fewer consumers are purchasing Apple?s more expensive devices and more are opting for lower-priced models.

As a result, Apple?s revenue is being pinched even as sales grow.

This is reflected in the company?s results for the second-quarter that ended June 29, which show revenue totaled $35.3 billion, up only slightly from $35 billion during the same period a year ago.

Additionally, the company reported quarterly net profits totaling $6.9 billion, or $7.47 per diluted share, down significantly from net profits totaling $8.8 billion, or $9.32 per diluted share, in the year-ago period.

Apple?s perceived troubles are being reflected in its stock, which reached an all-time high of $705 late last year but has been dropping ever since, losing 40 percent of its value.

Apple reported that it sold 31.2 million iPhones, up from 26 million in the year-ago quarter.

Surprising, sales for the iPad dropped from 17 million a year ago to just 14.6 million iPads during the second-quarter of 2013. The company attributed the decline to the fact that the iPad 3 was introduced in March of last year, which gave a boost to sales in the second quarter.

Loyal customers
Since Apple does not break out sales by model, it is unclear what percentage of 2013?s second-quarter sales were made up by lower-priced iPhone models or the iPad mini, which is priced lower than the iPad.

?Apple continues to hold ground as an aspirational brand but the market for high-end devices is fast becoming saturated and the only growth window is low-cost devices in emerging markets,? said Gary Schwartz, Toronto-based author of ?The Impulse Economy? and ?Fast Shopper, Slow Store.?

?While some operators still are required to meet volume guarantees made to Apple, this will not continue,? he said. ?Consumers are no longer buying new phones based on glamorous launch campaigns that tout better cameras, higher-resolution displays or a reduction of a millimeter in its profile.

?Apple?s needs to keep its loyalists buying across its portfolio of screens. Apple must focus on its multiscreen strategy with ?Maverick? and continue to expand its cloud and iTunes wallet positioning.?

Keeping it fresh
There are numerous reports about a variety of different products that Apple is supposedly working on in an attempt to broaden its appeal and drive sales.

These include the possibility of a lower-priced iPhone model featuring a plastic shell some time this year.

Apple is also reportedly testing larger screen sizes for the iPhone and iPad. Smartphones with screens bigger than four inches is a quickly growing category that Apple currently does not play in at all.

At the same time, Apple is reportedly working on a new 9.7-inch iPad for this year.

The company is also expected to introduce a new iPhone in the fall. It is expected to be labeled the iPhone 5S and will feature a few tweaks to the current iPhone 5 model.

?I think the one single factor keeping excitement low around Apple at the moment is that it's been nearly nine months since their last big product announcement,? said Carl Howe, vice president of research and data sciences at Yankee Group, Boston.

?Apple has synchronized all their major product launches to just before Q4 starts ?  a smart business strategy, by the way, because it creates the excitement in all its product categories when consumers have the highest intent to buy products during the holiday season,? he said.

?However, that strategy means that there isn't as much excitement in the first through third quarters.?

Cook on the hook
Apple also continues to try to mop up the mess it made with the Maps launch last year, with the service badly received by users. Recently, the company made two purchases in this area ? Hopstop and Locationary ? to help improve the location and transit data available from the service.

Some fingers are also pointing to Apple's Mr. Cook as part of the problem. Mr. Cook replaced Apple?s much-loved Jobs after he passed away and, according to some, has failed to ignite the same level of innovation at the company as it previously had.

Of course, all the naysayers could end up eating their words if Apple launches a smartwatch that catches on with consumers or some other hugely successful product.

?Despite the so-called lack of excitement around Apple, iPhone is still the best-selling smartphone in the U.S. and the world, as is the iPad in the tablet category,? Yankee Group?s Mr. Howe said.

?Apple remains the most valuable global brand, is still the largest technology company in the world by market capitalization and just broke into the top 10 of the Fortune 500 - it's No. 6,? he said.

?Yes, pausing for nine months is a risk, but Apple tends to optimize for getting things right, not pushing out products when Wall Street wants it to.?

Final Take
Chantal Tode is associate editor on Mobile Marketer, New York