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Apple's Succession Plan: Ternus in the Driver's Seat?
Apple's hinting at a changing of the guard, with Tim Cook possibly stepping down as early as next year. The frontrunner? John Ternus, currently SVP of Hardware Engineering. At 50, he's a decade and a half younger than Cook, and he's been a key player in Apple's product design since 2001. The company is projecting a solid 10-12% year-on-year revenue jump for the holiday quarter, thanks to the iPhone 17 launch. But underneath the surface, the timing raises some questions. Apple is ramping up succession plans for CEO Tim Cook and may tap this hardware exec to take over, report says - Fortune
Ternus has the resume. He's been at the helm of hardware engineering for pretty much every major Apple product in recent memory. He's even taken on a more public-facing role, presenting at keynotes, most recently the iPhone Air. Cook, who took over from Steve Jobs in 2011, has overseen a massive expansion of Apple's market cap, from $350 billion to a staggering $4 trillion. That's a compound annual growth rate (CAGR) of roughly 18%—a tough act to follow.
But here's where the numbers get interesting. Apple's stock price has been relatively flat for the past year, despite those revenue projections. Is this a sign that the market anticipates a slowdown, regardless of who's in charge? Or is it a more nuanced reaction to Apple's perceived weakness in the AI race?
The AI Elephant in the Room
Analysts have been hammering Apple all year for what they see as a lack of a clear AI strategy. Their AI-enabled Siri update, initially planned for 2025, is now delayed until 2026 or later. (That's tech speak for "maybe never.") They've also lost key AI talent, including Ruoming Pang, to Meta. This is the part of the report that I find genuinely puzzling. Apple, with its massive cash reserves, should be a magnet for AI talent. The fact that they're losing people suggests a deeper issue.
Consider OpenAI's recent acquisition of io for $6.5 billion, bringing in Jony Ive, Apple's former chief designer, to build AI devices. That's a clear signal that the next battleground is AI-powered hardware, and Apple seems to be playing catch-up. Cook has stated he prefers an internal candidate, and that Apple has "very detailed succession plans." But are those plans detailed enough to address the AI gap?
The market seems to be betting that Ternus, while a hardware whiz, might not be the AI visionary Apple needs right now. We're seeing a divergence between revenue growth, driven by existing products, and future growth, which hinges on AI innovation. Will Ternus be able to bridge that gap? Or will Apple need to look outside the company for an AI-focused leader down the line? The delay in the Siri rollout is not encouraging.
The Clock is Ticking
It's crucial to understand the stakes. Apple's market capitalization is built on a perception of innovation and market leadership. If that perception erodes, the numbers will follow. The transition from Jobs to Cook was relatively seamless, largely because Cook inherited a pipeline of groundbreaking products. Ternus won't have that luxury. He'll need to demonstrate a clear AI strategy quickly, or risk seeing Apple's dominance challenged. And if he doesn't work out, the question of John Ternus's net worth and John Ternus's salary becomes irrelevant.