Apple's Biggest Problem in U.S. Shows Why New Products are Needed

Apple's recent earnings report failed to meet expectations set by Wall Street analysts, and while the company is doing just fine financially, growth was a major pain point during the last quarter. In an interview with The Wall Street Journal, Apple CEO Tim Cook revealed something rather stunning: that Apple didn't see any growth in the United States during the last quarter.

"North America was a challenge," Cook said. "We had no growth basically as you could see from our results and that of course pulls down the top line because the weight is so large." Apple is focusing on two main strategies for increasing growth: emerging markets in places like China, where it recently began selling its iPhones on the world's largest wireless carrier, and by introducing new products.

In the U.S., new products will be key for growth. There's certainly growth potential in mobile, but the smartphone market is more saturated than ever and loaded with competitors; that's why Tim Cook's promise to enter new product categories is so important. Cook said Apple will be careful not to spray and pray, but to instead focus on making specific products great, as it has in the past. "Innovation at Apple is alive and well. but all of that being said, we can do more," Cook argued.

We don't know the new markets that Apple is going to enter for sure, but we can look at a lot of the whispers around the industry to get an idea of where to look. Wearables will probably be the most obvious market Apple will attempt to enter. The iWatch has been the subject of many headlines, and it may have a health focus – something Apple hasn't zeroed in on very much in the past. Similarly, we're also looking to advancement in the living room, particularly through updates to the Apple TV that may focus on new apps and gaming.

Apple can of course execute on these plans, largely because it has a ton of cash on hand for investing in research and development of new products. We already know it's opening a plant in Arizona for sapphire production that may be used on the aforementioned iWatch, and maybe on the next iPhone, and it has reportedly hired new executives to research and work on health-focused initiatives. These new products will likely be Apple's key to growth in the United States in the coming quarters – particularly if it changes existing markets, as it did with the iPod, the iPhone and the iPad.