John Ternus Takes the Reins at Apple Amidst AI Challenges
John Ternus officially became CEO of Apple on Sept. 1, succeeding Tim Cook after 15 years and inheriting a company valued at nearly $5T.
Cook isn't disappearing. He moves into an executive chairman role and has told Ternus he'll keep managing the company's relationships with President Donald Trump and the Chinese government.
The Cook-to-Ternus handoff is being compared internally to the Jeff Bezos-Andy Jassy transition at Amazon, with day-to-day power shifting while the predecessor stays close.
Ternus, 51, spent 25 years at Apple as a hardware engineer before rising to lead the entire hardware operation.
His first product event as CEO comes Sept. 9, featuring a slate that includes the first foldable iPhone and a smart home display that can recognize individual speakers.
AI is the urgent problem
Apple's AI stumble is the defining challenge Ternus walks into. After the first version of Apple Intelligence software underperformed, Apple rebuilt Siri's foundation using Google's Gemini technology, frustrating in-house model developers and pushing some to leave. The company's AI chief was removed and Siri's overseeing executive reassigned.
The revamped Siri AI is set for full-scale deployment in September. Early reviews are described as positive, though early Wall Street Journal tests showed it can take longer than rivals to complete requests.
Apple's stock trades at 33 times next year's earnings versus the S&P 500's 20 times, even though its earnings grow half as fast as the broader market.
Analyst Craig Moffett of Moffett Nathanson argues the premium reflects perceived safety, not growth. "When valuation gets stretched, safety isn't safe anymore," Moffett said.
Apple also faces a court-ordered reduction in App Store fees. Appfigures estimates US App Store commission revenue fell 6% in the June quarter as developers shift purchases to their own websites.
The management team in transition
Ternus also inherits a senior team nearing the exit. Chief Hardware Officer Johny Srouji, 61, told Cook last year he was considering leaving and is expected to depart within a year or two.
Retail and HR chief Deirdre O'Brien, 60, and marketing chief Greg Joswiak, 62, are also seen as likely departures within a few years.
Chief Operating Officer Sabih Khan, CFO Kevan Parekh, and services chief Eddy Cue are expected to take on larger roles as the older guard exits.
People close to the company say roughly half the Apple leadership team could leave within the next few years.
Ternus has already responded to a talent drain toward OpenAI's hardware division, issuing out-of-cycle bonuses worth hundreds of thousands of dollars to iPhone design team members. Apple has also sued OpenAI over alleged trade secret theft tied to hardware team poaching.
The foldable iPhone is expected to capture 40% of all foldable phone sales by end of 2027, per IDC estimates. Ternus's ability to pair that hardware momentum with a credible AI story will set the tone for his early tenure.