Reflecting on Tim Cook’s legacy and John Ternus’ future

If I could only use one word to describe Tim Cook’s Apple, I’d choose “stable.” The company’s chief executive is now retiring after a 15-year streak of transforming Apple from a scrappy Silicon Valley enterprise into a multinational conglomerate. Apple’s investors don’t check profits and losses — they ask Cook how much of a profit he has turned year over year. And that number just keeps rising, every quarter, every day. This is unheard of, not just in the technology industry, but in the stock market as a whole. Investors, to some extent, expect periods of profit and loss. But Apple is so strong as a company that it never incurs losses on any of its ventures.

This is not just business prowess: It is a wildly successful mindset that has governed Apple for the last decade or so. Cook’s leadership ushered in a period of stability and calm that engendered the beloved Apple products of the 2010s: the Apple Watch, AirPods, and Apple services like Apple Music and Apple TV. The iPhone and iPad kept growing despite intense competition from Android manufacturers, and Apple silicon became foundational to the company’s hardware engineering. All of this is thanks to a few lines of the Cook doctrine, given during Apple’s January 2009 earnings call: “We believe that we need to own and control the primary technologies behind the products we make,” and “We believe in saying no to thousands of projects so that we can really focus on the few that are truly important and meaningful to us.”

Apple really did control the primary technologies behind its products. Apple silicon in the iPhone lets Apple make mid-range smartphones with better performance than Android flagships. Apple silicon on the Mac delivers the best performance-per-watt of any computer line, bar none. Apple products are updated every year, like clockwork, and they’re always updated on Apple’s terms. Under Cook, Apple has said no to projects it didn’t think it could succeed in, such as generative artificial intelligence. This made Apple a boring yet predictable company, one that could always turn a profit even in hardship. Its supply chain, through solid business relationships and politics, postponed the new iPhone by only one month during a worldwide pandemic.

But all of this stability, in the eyes of Apple enthusiasts and people within the company, is anathema to the company’s “Think Different” attitude. “Think Stably” is not a very enthusiastic slogan. For the general public, Apple’s massive gap in artificial intelligence capital expenditure is worrisome, and some investors think the company has failed to innovate substantially by virtue of Cook’s conflict-avoidant leadership style. All of this is certainly true, which is precisely why Cook decided to step down at this moment. I think Cook believes this to be an inflection point for Apple, one where the stability that brought us the MacBook Neo and products like it must be replaced by the go-getter attitude of Jobs’ Apple. And for that, we have John Ternus.

Ternus, Apple’s senior vice president of hardware engineering, is, in Cook’s words, “a great engineer” first. Ternus gets innovation. He’s decisive, quick on his feet, and the very opposite of a consensus leader. Ternus, unlike Cook, prioritizes action over stability. This is not to say that stability is inherently bad — Apple’s market capitalization went from a few hundred billion dollars to $4 trillion thanks to stability — but it comes at the cost of innovation. Everything in business is a trade-off, and this is the trade-off Cook made during his 15 years. Cook is not a product person, and that has begun to show in Apple’s software and hardware in the 2020s. The suits are making the product decisions, while the engineers get sidelined.

Cook is astutely aware of this, perhaps even more than we are, which is probably why he has chosen this moment to step back. Apple is ready to spend aggressively on artificial intelligence and whatever other ventures it should pursue in the coming years. It is ready to embrace its other inner self and think differently again. It has strong executive leadership — a new software designer, a new chief financial officer, and a new hardware chief, Johny Srouji, currently Apple’s head of Apple silicon. And it has the cash reserves and supply chain it needs to undergo a massive reorganization. Stepping down at this moment, after 15 years of work, is one of the best decisions Cook has made during his tenure. I think this is a perfect place for one chapter to end and the next one to begin.

The CEO of the 2010s

After the loss of Steve Jobs in 2011, Apple was struck by grief and instability. Newly installed as chief executive officer a few months prior, Cook was regarded as the company’s natural heir. He rapidly expanded Apple’s supply chain and centered the company around turning a reliable profit every quarter. He had a single-minded focus on Apple’s well-being and almost nothing else. Cook was exactly what Apple needed in the 2010s — he delegated product decisions to other executives and focused on building bridges between teams. While Jobs set the foundation and company culture, Cook was to make an actual company out of it. That’s not to say that Apple wasn’t a full-fledged company in the Jobs era, but it probably would’ve fallen apart had it not been for Cook. It was nascent.

Jobs was the glue that held everyone together. He didn’t write the code or engineer the iPhone himself, but he was a visionary. And a terrific, once-in-a-generation visionary at that. If Apple employees didn’t know where to go next, Jobs would tell them. He knew what worked and what didn’t, and he knew how to make his ideas work. He had a brash, ruthless managerial style because he had utter confidence in his leadership and ideas. Without this confidence, Apple would have no leader, no DNA. Jobs’ best product isn’t the iPhone or the Macintosh or the iPod — it’s Apple itself. He gave Apple an identity and purpose — an utter conviction in making great products at the intersection of technology and liberal arts. He was a product person through and through.

Cook is not. I think he’d be the first to tell you that he’s not a product person and that he delegates product decisions to others. But he inherited Apple, a company so infused with Jobs’ DNA, now without the leader who told it how to operate. The great thing about this leadership transition was that the last thing Apple needed then was a product person. Jobs had already laid out a trajectory for how his company should be governed, and it was Cook’s job to execute that plan. That involved a mature supply chain, ownership of the company’s core technologies, and most of all, a hefty profit. And to make all of this possible, Apple needed the utmost confidence and support from investors, who had to be assured that the next chief executive wouldn’t, frankly, run the company into the ground. The company needed predictability.

So predictability is exactly what Cook did. He turned the App Store into the indispensable marketplace where most, if not all, Fortune 500 companies do business. He forged deals with Foxconn and Taiwan Semiconductor Manufacturing Company. He let Phil Schiller, Apple’s marketing chief, carry the Jobsian charisma onstage to maintain the company’s image. The result of this was exponential growth of the iPhone (and iPad, through the App Store) and new products: the Apple Watch, AirPods, and services wouldn’t have existed if not for Cook’s stability. Their course was charted by Jobs, but they came to fruition only after Cook determined Apple was in a great place.

None of these products was groundbreaking. There had been many fitness trackers and smartwatches before the Apple Watch, and AirPods were initially viewed as a pricey solution to the headphone jack’s removal on iPhone 7. But that was the ethos of 2010s Apple: stability and turning Jobs’ ideas into profit. We could argue about whether this was good for customers, but it’s certainly good business and even better capitalism. AirPods spurred a wealth of new “truly wireless” earbuds, and the Apple Watch normalized smartwatch use. Apple TV, née Apple TV+, has literally lost money to finance great, critically acclaimed television shows like “Severance,” “Ted Lasso,” and “The Studio.” I’ve said many times before that no other television studio would’ve made “Severance” because of its price, but Cook’s Apple was able to pull it off. Cook transformed Apple into the world’s most valuable corporation, one that makes reliable products relatively free of scandal or resentment.

But Cook’s focus on stability exacted high costs. (Again, everything in business is a trade-off.) One of these was the near-death of the Mac, a product line that hadn’t gained popularity like the iPhone and thus didn’t contribute much to Apple’s revenue. Jobs had forged a partnership with Intel in 2006, setting the Mac up for cruise control, but it was up to Cook to realize the Mac needed help during the mid-2010s. Instead, in his tendency toward deference, he ceded control to Jony Ive, Apple’s longtime product designer responsible for, among many other things, the iMac — the first mainstream internet-connected home computer. Jobs made Ive great, and Ive made Jobs great; without Jobs, Ive lacked product direction. He was the wrong person to make judgment calls for the Mac.

What came of Cook’s deference to Ive was three lackluster Macs: the “trash can” 2013 Mac Pro, the 2015 MacBook, and the 2016 Touch Bar MacBook Pro. Each of these computers was stunning (thanks to Ive) yet terribly dysfunctional. When Ive came to Jobs with an idea back then, he’d sometimes let it slide (the “hockey puck” Apple USB Mouse), but more often than not, he’d dial Ive’s decisions down. (This is how we got the iMac, the iPod, and the iPhone.) With Ive given a say over the Mac’s final design — and Cook not being a product person to make final decisions — the Mac weathered a hardware slump. Coupled with poor Intel processors, the butterfly keyboard mechanism, and the lack of a true Pro desktop, Mac sales dwindled even further.

Cook, being away from product development, did not recognize that the issue lay in product development. Instead, he (correctly) saw Mac sales dwindling while iPad sales — due to the newly introduced iPad Pro — skyrocketed. Cook let the iPad thrive and the Mac settle into an uncomfortable rut until the public relations disaster spiraled out of control, leading to the Mac roundtable in 2017 and the subsequent iMac Pro release. This is my reading of the era, at least, but it seems likely that this is what transpired. And even if the details are wrong, the outcome was the same: Cook’s product deference caused the Mac to be sidelined. It was only after Cook realized, per the Cook doctrine, that the Mac needed to transition to Apple silicon that the proper teams were assigned to bring the Mac back to life. (Ive was also slowly phased out of the picture, leading to his departure in 2019.)

This is obviously speculation, but if I had to say why Cook gave Ive so much power over the Mac, it’s because he thought Ive was the closest to Jobsian thinking. He did develop Apple’s most revolutionary products, after all. It’s the same reason Cook gave Ive control over iOS after firing Scott Forstall, Apple’s software chief who led the development of Apple Maps when the app was widely criticized. Cook later said that he should have handled the Forstall situation better. At the time, Cook forced Forstall to apologize for Maps, and after Forstall (in typical Jobs fashion) refused, he was let go.

If Jobs had been alive when Maps flopped on release, he would have been irate at Forstall, but he would ultimately have taken responsibility for the oversight. (That, or he would have insisted it was fine.) Either way, Jobs would have been heavily involved in the development of Apple Maps as the company’s visionary. Cook wasn’t, and so when one of his departments produced a terrible product that hurt Apple’s bottom line, he expected the head of that department to take the blame. This is one of the clearest examples of Cook’s managerial style: He expected product decisions to be made more or less autonomously. Cook later put Ive in charge of iOS because he believed Ive was more Jobsian and would take more responsibility, leaving development under Craig Federighi’s purview. This resulted in iOS 7, which one could argue was even more of a disaster. A pattern is clearly emerging here.

To Cook’s credit, iOS 7 didn’t tank the company’s valuation. People got used to it, Federighi’s team was clearly competent at writing good software, and all was well. But that was all that mattered to Cook — ensuring the company’s bottom line, and therefore, its ability to invest in future products — and he’s clearly still frustrated with how that turned out. His admission that the Maps fiasco was one of his biggest regrets, to me at least, is an acknowledgment that he should’ve shouldered the blame for more of Apple’s product shortcomings. I also think he, as a business-savvy man, believes Ternus will be more decisive and less likely to defer key decisions to subordinates.

I disagree with Cook, however, that his biggest misstep is the lack of product direction — I’d argue it’s his overreliance on China. China was Cook’s most salient asset in bringing stability to his company. He needed cheap, reliable labor to ensure the new iPhone came out like clockwork, and during the late aughts and early 2010s, there was no better place for that than China. But this solution lacked foresight, and I think even Cook would agree, because he started to correct his mistake after the Covid pandemic ground the Chinese supply chain to a halt. Apple put all its eggs in one extremely volatile basket, and coupled with Apple silicon production in neighboring Taiwan — which China could invade any day — Cook realized he had to get out of there as soon as possible.

And so he did. Apple, through its suppliers Foxconn and TSMC, built new plants in India, Brazil, and the United States. This will clearly be a priority of Ternus’ — and Cook’s, in his new role as executive chairman of the board — because China is a ticking time bomb. While a Chinese invasion of Taiwan isn’t imminent, it’s certainly close, and if it happens before Apple moves iPhone and processor production out of China, it will cause a much longer delay than just the one month in 2020. Ultimately, Cook can’t be blamed for geopolitics, but the extent to which he went to placate a country that he’d eventually be desperate to leave is dishonorable.

My understanding of this whole situation — Cook’s genius and his flaws — is that, by the 2020s, Apple began to overcorrect. While it required the clever ingenuity Cook had through the 2010s to turn reliable profits and get product releases on a set calendar, the company’s structure was once again craving product direction after reaching the apotheosis of the Cook era. The pandemic illustrated that Apple needed to leave China. And, perhaps more importantly, the AI bubble evinced that the Cook era had to be bookended soon. Apple’s beloved stability was beginning to fray after constant legal trouble with Epic Games and regulators around the world. Consumers and their representatives grew tired of Apple’s miserly attitude.

This is why I titled this section “The CEO of the 2010s.” Cook was a phenomenal chief executive who led Apple through the grief and pain of Jobs’ passing and made the company worth trillions of dollars in such a short time. He is unquestionably the most successful chief executive of any modern company. Apple products are as dependable, popular, and useful as they are today thanks to his leadership. But as the 2020s emerged, his knack for profit-seeking only began to hurt Apple in the eyes of governments and the public. His less-than-ideal product knowledge made Apple completely miss out on the AI capital expenditure race, causing alarm among investors. Apple all but abandoned developer relations in the 2020s, leading to the lackluster launch of Apple Vision Pro. These are modern Apple’s problems, and they require the Jobsian go-getter attitude to conquer.

Every business needs periods of stability and growth, and the 2020s have been marked by overcorrection in the stability direction. Apple became more obsessed with services revenue, which grew into Apple’s second-largest source of revenue. Part of this is people subscribing to Apple Music or whatever — Apple’s advertisements for services are now littered throughout the operating systems — but most of it is rent-seeking behavior. The 30 percent cut on in-app purchases, the Safari revenue deal with Google, and many other revenue-maximizing gambits. Cook, through his goal of stability, turned Apple into a company that makes its money through reliable, monthly transactions, not product releases. And Cook’s Apple has fought war after war to ensure its ability to keep those monthly transactions flowing through its hands.

Apple is now a company of two minds: the one fond of comfort and stability, and the one infused with Jobs’ risk-taking DNA. I think Cook correctly realized that, with the company stable and rich, it’s time for Apple to embrace the Jobsian attitude of competitiveness and instability again. Tim Cook will be remembered well in Apple history. While the 2020s have been less than ideal for Apple, I think his maturity in stepping down at this moment will prove immensely consequential for Apple’s future.

A Return to Thinking Different

Much like how Jobs made the correct decision to install Cook — and his fondness for predictability — as chief executive in 2011, Cook made the correct decision in choosing Ternus as Apple’s next chief executive. Ternus graduated from the University of Pennsylvania with a bachelor’s degree in mechanical engineering and has been senior vice president of hardware engineering since January 2021, after Dan Riccio was moved to work on Apple Vision Pro. As hardware engineering chief, Ternus oversaw the development of the Apple silicon Mac redesigns, a three-year period that brought the Mac to its best state since the Intel transition in 2006. Apple hardware is reliable, price-competitive, and performant — more than it has ever been in Apple’s history.

Ternus has been described as a decisive leader, and I see the fruits of this in the Mac’s success of the 2020s. But I find his background in engineering to be the most exciting part of his résumé. Ternus is a product person. He worked on the Mac for many years before his promotion to the C-suite. He has been an engineer at Apple, not a money-maker. Similar to how Cook deferred product decisions to other C-suite executives, I’d imagine Ternus will delegate the company’s finances to Kevan Parekh, Apple’s chief financial officer, as well as other internal departments. Perhaps this notion is misguided, but I get the sense that Ternus cares less about optimizing return on investment than about engineering great products. Only time will tell if this intuition is correct.

For Wall Street, this really only means one thing: a massive boost in capital expenditure. Among Silicon Valley tech companies, Apple has invested the least in AI technology. It doesn’t have the product to package AI, it doesn’t have the models to deliver those products, it doesn’t have the infrastructure to run pre-training and inference, and it doesn’t have the people to orchestrate any part of this process. While companies like Google, OpenAI, and Anthropic are investing heavily in each part of the AI stack — infrastructure, people, inference, product — Apple has stayed mum. For the next chief executive’s tenure to be successful in Wall Street’s eyes, Ternus must rapidly increase capital expenditure.

This requires a product sense that Cook lacks. Even Federighi has this quality: When he first tried out ChatGPT, he knew Apple would eventually be forced to invest in that space. I don’t think Apple will ever become the next OpenAI, or even Google, in the AI space. Apple is a hardware company that makes integrated software to run on that hardware, and becoming a model supplier or a cloud inference company is not realistic. Even if it did increase capital expenditure to hire more of those people — and it would have to increase it by a lot — it would have to invest equally in product people to get those products into consumers’ hands. Apple is a product company.

To that end, I think Ternus will be solely focused on getting Apple’s AI product working. He’ll work with Srouji, the new hardware chief, to optimize Apple silicon and the next generation of iPhones, iPads, Macs, and smart home devices to run local inference quickly. (Apple silicon is already a leader in this space.) He’ll work with Federighi and Mike Rockwell, the executive in charge of the revamped Siri, to get the Siri product out the door by the fall. And after that, it’s a marketing game — Apple should continue to push out useful software updates with new features and change out the models frequently. All of this just needs a person at the helm who is deeply invested in product. Ternus seems like that person to me.

Much like Jobs was the visionary glue that held Apple together, I don’t think Ternus will be actively involved in the tiniest development decisions. I get the sense that he will, however, closely monitor even small personnel changes, attract new talent, and spearhead initiatives for new, innovative features. He’d play a very Jobsian role in the new Apple, one where most big features and investments would have to come to him for final approval. These investments will, of course, take money — which is acceptable, knowing how much money Cook infused into the company — but they’ll also require product experience. Ternus, being the hardware chief, is certainly aware of how people rely on Apple hardware. He knows what sells and what doesn’t, what products deserve more attention and which ones don’t. He has intimate product experience, exactly what Apple currently needs to thrive.

Ternus is again the safe choice for Apple’s top position. Investors are looking for massive gains in capital expenditure; they’re looking for new AI products. In a world where a text editor with AI integration enters a purchase agreement with SpaceX for $60 billion — $28 billion more than Elon Musk bought Twitter for — it’s not hard to see that any AI product will usher in a new wave of investment. The tech industry is indubitably in an AI bubble, but Apple has the unique opportunity of being best suited to deliver AI products to many more people than OpenAI or Anthropic. It could, under Ternus’ leadership, realize AI’s true potential.

I also think Ternus will be conscientious in maintaining developer relations, though probably to a less-than-desirable extent. Ternus was one of the three men at the Mac roundtable — the other two were Federighi, representing software, and Schiller, representing marketing — and brought a technical voice to the discussion. The Mac roundtable was about placating professional Mac users and alleviating their concerns about the future of the desktop Pro Mac line. Ternus’ involvement in this event, alongside the updates to the MacBook Pro and the positioning of the Mac Studio as a modular workstation, leads me to think he takes the Apple enthusiast and professional markets seriously. They’re niche markets to the point of irrelevance, but catering to their needs is sacrosanct to the overall health of the company.

Third-party developers are part of this contingent, and I think Ternus will want to satisfy them more than Cook did. Cook saw the App Store for arguably what it is: a place for other influential companies to do business on Apple’s platform. Companies like Spotify and Epic, sure, but also ones like Uber that couldn’t have launched without the iPhone. Cook sees the third-party developer market as minute because, in the scale of the App Store, it is. Ternus is likely to learn from, and in some ways, inherit Cook’s idiosyncrasies of profit and stability — overall growth of the company — but I think he’ll be more receptive to pro-developer voices. I’m not quite sure how this change will materialize, but I think it’s a safe prediction that Apple will be friendlier to niche groups, like third-party developers and professionals, under Ternus’ leadership.

I also think Ternus wants to distance himself from the high-profile politics that have shadowed and, in many ways, marred Cook’s tenure. Cook, as executive chairman of the board, will focus on government affairs, which I largely support. Critics of this rearrangement say that it doesn’t give Ternus the freedom to govern, but I really don’t think Cook is an authoritarian leader. I think he’ll give Ternus all the room he wants to run the company, but when faced with governments, legal affairs, and the Chinese supply chain, Cook has the contacts and relationships that would take Ternus years to develop. And indeed, to develop those relationships, Ternus would have to capitulate to unsavory governments and demands antithetical to the values Apple stands for. Call it a separation of church and state. I don’t think Ternus should ever be in the precarious position of watching movies with the president of the United States.

Ternus is as imperfect as any human being, but I’m choosing to give him the benefit of the doubt. In particular, as vice president of Mac hardware, Ternus oversaw the worst era for the Mac since Apple was on the verge of bankruptcy. The 2013 Mac Pro, the 2016 MacBook Pro, and the rumors that Apple would somehow ditch the Mac entirely for the iPad — rumors so omnipresent that Apple had to shut them down at the 2018 Worldwide Developers Conference — diminished trust in Ternus’ leadership. But I feel these concerns are better directed at a lack of product-level leadership in the C-suite. By this time, Ive had all but left Apple after redesigning the new Macs, and the Mac had no clear sense of direction. It had nobody to give it a clear sense of direction. It was ultimately Ternus’ team that recognized the problem, promised a solution at the Mac roundtable, and promptly got to work on the 2019 Mac Pro and 2019 16-inch MacBook Pro.

If we’re to chide Ternus for the Mac’s pitfalls in 2017 — which I think is facile but fair — I think it’s important that we credit him for the transition to Apple silicon. While Srouji’s team spent years on the silicon behind the transition, it was Ternus who presumably made the ultimate judgment call to redesign the MacBook Pro and MacBook Air, and eventually to launch the Mac Studio. These were decisions that saved the Mac. If anything, these decisions prove that (a) Ternus is intimately familiar with what isn’t working and how to fix it, and (b) is open to changing his mind quickly, bringing new products to market in just four years.

We like to think of Apple, from the outside, as this rigid company with timelines set far into the future, and I think Ternus is willing to eliminate that stigma. The current moment calls for rapid innovation in AI, just like the Mac required life support at the end of the 2010s. If Ternus handles AI and capital expenditure just like he handled the Mac, I think Apple has a real shot at getting through the bubble and doing what it does best: shipping products by owning the core technologies it uses. The stakes are high for Ternus’ leadership, but I couldn’t name a person better suited for the task. I hope I’m not proven wrong.

The months and years ahead will certainly be exciting, but I also know they’ll be different. And I guess that’s all that it’s really about, this Think Different thing.