Apple said this week that Tim Cook, its CEO since 2011, will step down and become its executive chairman in September. John Ternus, the company’s head of hardware engineering, will replace Mr. Cook in the corner office.
Mr. Ternus, who has worked at Apple for 25 years, will take over the money-making behemoth that faces a number of pressing issues, including geopolitical threats, an unpredictable man in the White House, artificial intelligence and the search for new ideas.
Here are some of the challenges Mr. Ternus faces:
Navigating Apple’s ties to China.
Apple makes an estimated 80 percent of its iPhones in China. Land also at times accounted for a quarter of the company’s annual revenue. The relationship has become a sore spot for Apple, especially as tensions flare over Taiwan’s future.
As an engineer, Mr. Ternus has experience in Asia. Around 2005 — four years after joining Apple — he led the company’s team of hardware engineers for iMacs. In this role, he spent a long time working with manufacturers in Asia. He also learned how difficult it can be to have a manufacturing supplier that meets Apple’s design expectations.
But as CEO, Mr. Ternus will have to learn a delicate balancing act. He will have to navigate the often conflicting agendas of President Trump and Xi Jinping, the Chinese leader. It will also have to manage the risk of a Chinese invasion of Taiwan and disruption of chip exports to US companies such as Apple.
Apple has taken steps to diversify its supply chain, moving some production to India, Vietnam and Thailand. But many of the complex components in the iPhone, such as displays, are still assembled in China.
Mr. Ternus may have a long way to go before he has to become Apple’s emissary in Beijing. As executive chairman, Mr. Cook will “assist with certain aspects of the company, including working with policymakers around the world,” Apple said in a press release on Monday.
Courting President Trump and Washington.
In recent years, Mr. Cook has become a leading diplomat for the technology industry. He has spent years forging a relationship with Mr. Trump, who has criticized Apple for not making iPhones in the United States and threatened tariffs on its devices.
Last year, Mr. Cook gave Mr. Trump a 24-karat gold glass plaque as the company courted the administration. In 2019, Mr. Trump called Mr. Cook “Tim Apple,” a slip the executive embraced by briefly changing his last name to an X in the Apple logo.
“Tim would call me, but never much, and I would help him where I could,” Trump said in a post on Truth Social on Tuesday. When Mr. Cook first called him, Mr. Trump added: “I was very impressed when the boss of Apple called to ‘kiss me.’
As in Beijing, Mr. Ternus will have to learn to play in Washington. In addition to tariffs and Mr. Trump, an upcoming antitrust lawsuit looms over Apple. In 2024, the Department of Justice sued the company, accusing it of building and maintaining a smartphone monopoly. That suit is expected to go to trial next year.
Apple’s suppliers have moved some production to the United States. The Taiwanese chip manufacturer is building a factory in Arizona, whose biggest customer will be Apple, for example. But Apple still has no public plans to manufacture iPhones in the country.
Building a new management team.
The execution of Apple’s announcement that Mr. Ternus would replace Mr. Cook seemed clean; the company’s share price barely moved. But the arrangement itself can be messy.
Mr. Ternus will have to find his own path as chief executive, even with Mr. Cook as executive chairman. Much of that will depend on whether Mr Cook steps aside and allows Mr Ternus to make key decisions.
CEOs often complicated the rise of their successors, said David Larcker, director of the Corporate Governance Research Initiative at the Stanford Graduate School of Business.
“You want the CEO to have enough room to pitch his stuff and ideas and have a fair chance,” he added.
And a new CEO often means turnover in the management ranks, Mr. Larcker said. Those in the running for the top job may move on, while senior leaders may retire rather than work under a new CEO.
Mr. Ternus will soon have a number of direct reports who have worked at Apple for four decades or close to it: Greg Joswiak, head of marketing; Eddy Cue, Service Manager; and Deirdre O’Brien, Head of Retail and Human Resources.
In addition, Apple has recently seen an unusual number of departures among both its executives and its rank-and-file employees. Jeff Williams, its chief operating officer, resigned in July. Lisa Jackson, its chief environmental officer, retired in January. And Kate Adams, who replaced Ms Jackson and was previously general counsel, will retire later this year. Mr. Ternus will have to navigate those departures and add to his own leadership team.
“CEO succession is a multi-people event,” Mr Larcker said, adding: “There’s potentially a whole group of people in play.”
Finding Apple’s way with AI
Almost two years ago, Apple announced the arrival of a new and improved Siri. The personal assistant had been part of its devices for more than a decade, but it languished and frustrated consumers with its limited capabilities.
But Apple delayed the Siri upgrade due to quality issues. Since that stumble, the company has been quiet while other tech giants have invested hundreds of billions of dollars in AI development and startups have broken new ground in the technology.
For now, Apple is filling the gap with technology from Google. In January, the companies said Apple would base Siri and other artificial intelligence products on AI Gemini models and Google’s cloud computing services. This arrangement allows Apple to avoid much of the laborious and expensive process of developing AI models, which requires the computing power of massive data centers.
But the delay in charting a path with AI has left Apple and Mr Ternus with high expectations. That includes finally improving Siri and responding to the threat posed by devices from rivals, including the Meta smart glasses and OpenAI’s upcoming collaboration with former longtime Apple design chief Jony Ive.
“Now they have to hit a home run, whereas before they just had to hit a single,” said John Burkey, who worked on Siri from 2014 to 2016. “The great thing about him being the new leader is that he can lead with a new brand and basically say, ‘Now we’re really serious about AI.'”
Tracking Apple’s growing product line.
Despite Apple’s years of financial success, Mr. Cook has never shaken the impression that he is not the technological visionary of Steve Jobs, the company’s co-founder and his predecessor as CEO. During Mr. Cook’s tenure, Apple’s reputation as an industry-changing innovator declined.
Inside Apple, Mr. Ternus is better known for maintaining products than developing new ones. However, in recent years it has taken on more responsibility for product updates. Mr. Ternus was involved in Apple’s experimentation with foldable phones. He also spearheaded the iPhone Air, which was released last year with a new slim design. The phone’s marketing was well received, but its sales disappointed.
Mr. Ternus enters his new role with high hopes that Apple will push the boundaries of product design. It has expanded its product line so much that some of its devices have become difficult to distinguish and arguably even more difficult for executives to manage.
“Apple remains incredibly dependent on the iPhone and related services,” said David Yoffie, a professor at Harvard Business School who has written case studies on Apple. “For the company to grow, it will have to find new ways to expand into new product categories and new technologies.”
