Apple (AAPL) revealed on Monday that CEO Tim Cook will step down from the post he has held for roughly 15 years and be succeeded by senior vice president of hardware engineering John Ternus.
Ternus inherits a company with a roughly $4 trillion market cap and annual revenue north of $400 billion. It’s among the most recognized brands on the planet and has helped popularize everything from smart watches and tablets to wireless headphones.
But Ternus will also step into his new role at a time of major technological upheaval driven by the AI explosion. Apple is largely seen as a laggard in AI thanks to its long-delayed updates to Siri and Apple Intelligence. He’ll also have to contend with a world that is quickly looking for ways to create AI-centric hardware.
What’s more, he’ll have to prove he’s as politically savvy as his predecessor at maneuvering throughout Washington and across foreign governments.
And he’ll have to do all of that while moving one of the world’s most valuable companies into the future.
“The baton will pass effortlessly to Ternus, an insider” Francisco Jeronimo, vice president of client devices at IDC, said in an email. “But he must resist the temptation of incrementalism that has plagued Apple of late and escape the iPhone’s gravitational pull in his quest for the next disruptive form factor.”
“As Ternus assumes the helm, he must define Apple’s future as ferociously as he defends its past,” Jeronimo said.
The AI issue
One of Ternus’ first items of business will be addressing the company’s AI shortfall. Apple was caught flatfooted by the launch and incredible interest in OpenAI’s (OPAI.PVT) ChatGPT, and it has struggled to regain its footing in the growing AI space.
Ternus will need to ensure that Apple becomes a larger player in AI to both avoid falling further behind rivals Samsung (005930.KS) and Google (GOOG, GOOGL) and appease Wall Street, which has been critical of the company’s lack of AI innovation.
“We can’t say it enough, but Apple cannot watch the AI era from the sidelines as this 4th Industrial Revolution takes hold,” Wedbush analyst Dan Ives wrote in a research note.
Apple SVP of hardware engineering John Ternus will become the company’s next CEO on Sept. 1. (Foto AP/Bebeto Matthews, Archivo)
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“In essence, Apple is a toll collector on the consumer AI highway, and Ternus needs to finally get the AI strategy right and focus on monetization going forward,” he added.
Apple will likely launch its new generative AI-powered version of Siri at its WWDC event in June, serving as a starting point for the company as it repositions itself in the AI race. Still, it will have to go beyond a better Siri if it’s going to improve its standing among consumers and investors.
A post-iPhone world
On a similar note, Ternus will also have to work to provide the world with a better understanding of Apple’s direction in a post-iPhone world. The smartphone market is already incredibly mature, and while the devices will remain central to daily life for the foreseeable future, Ternus will need to position Apple for the next generation of AI-centric hardware.
“I think this is a moment where the company’s like, ‘We’ve really milked two decades out of one really important core product, and now we need someone in that’s going to be looking hard, that’s going to be thinking deeply, that’s going to considering what the major shift that AI is creating is, and how that needs to be reflected in the Apple portfolio,” Futurum Group CEO Daniel Newman told Yahoo Finance.
Apple’s iPhone has made the company what it is today. It’s a vessel for customers to sign up for services like Apple TV+, Apple Music+, and iCloud subscriptions and serves as the key to accessories like the Apple Watch and AirPods. It’s also Apple’s largest business segment, accounting for $209.6 billion of the company’s $416.2 billion in revenue in 2025.
But Apple can’t rely on a product that debuted in 2007 to carry it forever.
“That’s where John Ternus comes in,” Forrester vice president and principal analyst Dipanjan Chatterjee said in a statement.
“Ternus is a hardware engineer, which signals that Apple will seek differentiation in its physical products even as it looks to reframe the device as a substrate for intelligent experiences,” Chatterjee said. “Ternus represents a quiet pivot back toward product intimacy, a tighter coupling between hardware, software, and emerging AI capabilities.”
What that kind of product will look like is still very much anyone’s guess, but it will be imperative to ensuring Apple’s continued success.
“The software and Services monetization hinges on Apple’s unrivaled installed base … but innovation going forward around foldable phones, an AI-enabled smartphone, new sleeker/ affordable Apple Glasses, and future hardware developments will be the hearts and lungs of Apple’s success,” Ives wrote in his note.
Playing the political game
Beyond his work on AI and new hardware, Ternus will also have to navigate Apple’s relationship with the Trump administration and future administration to come.
Cook has been a relatively smooth political operator, with Trump largely praising the CEO in a post on the Truth Social platform.
Cook has also occasionally pushed back against what he saw as government overreach, such as when the FBI demanded the company provide a backdoor key to an iPhone owned by a terrorist in the 2016 San Bernardino attack.
Ternus will need to thread a similar needle if he seeks to continue to keep Apple out of the political spotlight.
For now, though, Cook is still CEO and assisting with the planned transition to Ternus later this year. And there’s little doubt the two will have a good deal to discuss in the interim.
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Email Daniel Howley at dhowley@yahoofinance.com. Follow him on X at @DanielHowley.
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