Apple names John Ternus next CEO as Cook shifts to chairman role

Apple said on Monday (April 20) that John Ternus will become its next chief executive on September 1, with Tim Cook stepping down after nearly 15 years in the role and moving into the post of executive chairman, in a leadership transition that surprised Wall Street and immediately put the spotlight on the company’s AI strategy, hardware pipeline and coming earnings.

The move hands the top job to another insider as Apple, now the world’s second most valuable company, tries to navigate a technology market being rapidly reshaped by artificial intelligence. It also raises fresh questions over whether Ternus can keep up the pace set by Cook while delivering a more convincing AI strategy for a company that investors increasingly see as trailing rivals.

Ternus, 50, joined Apple in 2001 and is the same age Cook was when he succeeded co-founder Steve Jobs as chief executive. Long seen as a likely successor, he has played a central role in reviving the Mac, which has gained market share against PCs, and has been deeply involved in major products, including the iPad and AirPods. Though he has mostly kept a low public profile, Apple has recently given him more exposure, allowing him to speak with the press about products. In September, he introduced the iPhone Air, part of the biggest revamp of Apple’s top-selling product in nearly a decade.

He now takes over at a critical point. After years at the top of the global market-cap rankings, Apple has lost that crown to AI chipmaker Nvidia, as investors fret over its lack of a breakthrough in the technology changing how people work, create and get information. Integrating AI into the iPhone, the most successful consumer product in history, may prove to be Ternus’s hardest challenge.

In January, Apple struck a deal with long-time smartphone rival Google, owned by Alphabet, to use Gemini to improve Siri. Yet despite helping introduce AI assistants to the public imagination with Siri in 2011, Apple has still not produced a major hardware or software hit centred on the new wave of AI, while newer rivals such as OpenAI’s ChatGPT have attracted hundreds of millions of users. Siri, in particular, has still not become an “agent”, the term AI firms use for systems that can carry out complex tasks like a human assistant.

Bob O’Donnell, head of tech consulting firm TECHnalysis Research, said: “I expect his biggest challenge and efforts will be focused on getting a better AI story and putting together one that relies more on Apple’s own capabilities and less on third parties.”

Ternus will also have to deal with intensifying hardware competition. Meta Platforms has scored a surprise hit with augmented-reality glasses that offer only a fraction of the capabilities, and cost only a fraction of the price, of Apple’s Vision Pro headset, which starts at more than US$3,499. NVIDIA, too, has unveiled its own personal computer and is working on chips that can power laptops.

Gil Luria, managing director of D.A. Davidson & Co., said: “The promotion of Ternus indicates the company will focus on new hardware devices such as folding phones, glasses, VR devices and AI pins.”

Cook, 65, leaves the CEO post after a tenure that transformed Apple into a global consumer brand producing hundreds of millions of devices a year. Apple said the company had grown by roughly US$3.6 trillion in market value during its 15 years in charge. In its own statement, Apple said Cook led growth “from a market capitalisation of approximately $350 billion to $4 trillion”, a rise of more than 1,000 per cent. The company added that annual revenue nearly quadrupled from US$108 billion in fiscal 2011 to more than US$416 billion in fiscal 2025. It also said Apple now operates more than 500 retail stores, has more than doubled the number of countries in which customers can visit an Apple Store, has added more than 100,000 team members and has expanded its active installed base to more than 2.5 billion devices.

Cook was recruited by Jobs from Compaq at a time when that company was thriving on the 1990s personal computer boom and Jobs was trying to pull Apple back from the brink of insolvency. Cook built his early reputation by expanding Apple’s vast supply chain through contract manufacturers in China, creating a model that became the envy of Corporate America by keeping expensive factory operations and product inventories largely off Apple’s books while maximising profits.

Apple’s decades of investment in China also helped drive the country’s rise as the world’s workshop, a dependency Cook has found difficult to unwind. Although Apple has opened assembly operations in India and Vietnam, it still sources many key parts and subsystems from China. Cook has also yet to present US President Donald Trump with a “Made in USA” iPhone, despite hundreds of billions of dollars in investment in Apple’s US supply-chain partners. The company said Cook will continue to engage with policymakers. Last year, he presented Trump with a custom golden plaque.

Over time, Cook became a celebrity chief executive in his own right. In 2014, he became the first Fortune 500 CEO to come out as gay and took public positions on issues such as workplace diversity and corporate sustainability.

Apple shares slipped less than 1 per cent in late trading after the announcement, after rising about 1 per cent during regular trading. The stock has surged 20-fold since Cook took over as CEO in August 2011. The leadership change also ensures that Apple’s next quarterly earnings report, due on April 30, will be watched even more closely than usual.

Rick Meckler, partner at Cherry Lane Investments in New Vernon, New Jersey, said, “Tim Cook did an amazing job. And I’m not surprised that the initial reaction is for the stock to be a little bit lower. But he will be the executive chairman. I imagine he’ll still be part of the larger strategy of the company.

“He has been an incredibly successful CEO, coming into a situation where you thought it would be hard to replace the person before. I hate to see him leave the CEO spot, as an investor.”

Art Hogan, chief market strategist at B. Riley Wealth Management in Boston, said: “He would never leave if the numbers were going to be bad, so I think that that’s the important thing. They’re about to report numbers, and you know they’re going to be good. You know the guidance is going to be positive. And you know we’re going to start hearing more about how they are going to use artificial intelligence to improve their products.

“He’s been a transformational Apple CEO who’s always had a steady hand at the wheel. I think that will be his legacy. He had massive shoes to step into, and he was the right person for the job. That’s the way he’ll be remembered.”

Tim Ghriskey, senior portfolio strategist at Ingalls & Snyder in New York, said: “The company has done very well. And you know, its stock price, the value of the company, has increased dramatically. A lot of that is being in the right place at the right time, but I think they’ve made the right moves, and I think they’ve grown their user base.

“Earnings are upcoming, so he probably wanted to get it out there, so it didn’t become an issue in the earnings.”

Jacob Bourne, analyst at eMarketer in New York, said: “This transition shouldn’t come as a shock, as Cook is at retirement age and Ternus has long been rumoured as the successor. Cook staying on as CEO through September before continuing as executive chairman should provide some degree of reassurance to investors, even as markets react negatively to the near-term uncertainty.

“Cook successfully steered Apple through multiple periods of turbulence, and handing the reins over during another turbulent moment, which includes supply chain disruptions, tariffs and the AI race, is notable timing, though a fresh CEO also brings the opportunity for fresh solutions. Ternus’ hardware engineering background signals that Apple’s commitment to consumer hardware isn’t going anywhere, even as the company works to close the gap on AI.”

Separately, Apple said Johny Srouji, who has overseen the company’s custom chip and sensor designs, has been named chief hardware officer. He will continue to lead that group, while the hardware engineering unit previously led by Ternus will now be overseen by Tom Merieb.

Reuters