Cook hands Apple to Ternus: bigger and richer, but catching up in the AI race

When Tim Cook took over as CEO of Apple, he didn’t try to take the place of its legendary founder and product visionary Steve Jobs. Instead, he followed Jobs’ advice: “Never ask what I would do, just do the right thing.”

Fifteen years later, having taken the iPhone maker from a $350 billion company to a more than $4.5 trillion giant, Cook will pass the baton to Apple hardware chief John Ternus, who will lead the company in the age of AI.

Cook will become chief executive on Sept. 1, guiding Apple’s dealings with policymakers amid tense relations between its home market, the United States, and China, where many of its products are made.

The transition caps one of the most consequential CEO mandates in history.

Unlike Jobs’ product design genius, Cook rose up Apple’s ladder by making the company’s supply chain the envy of all manufacturers. As CEO, Cook used this operations-first mentality to bring Apple’s cutting-edge products to the masses.

In a perfect example of his business acumen, Cook understood that Apple could make money off the customer long after the iPhone was sold, turning the base of 2.5 billion installed iPhone users into a recurring revenue machine. That business has outpaced the growth of the company’s hardware business in recent years.

Apple’s annual sales rose from $108 billion at the start of Cook’s tenure to $416 billion in the last fiscal year, while profits quadrupled to $112 billion.

Its wearables business, home to Cook-era iPhone accessories such as Apple Watch and AirPods, generated $35 billion in sales in fiscal 2025.

“Cook not only created his own path to operational and supply chain success, he also created a ‘values-driven’ culture within Apple,” said Christopher Brown, a financial adviser at private wealth management firm Synovus Securities, which owns shares in the iPhone maker.

“What followed was a flywheel of consumer brand loyalty and dependence that generated billions of dollars in revenue.”

AI and other bugs

Critics have long accused Apple of losing its innovation edge in the Cook era. Cook, they say, “has failed to respond to what comes after the iPhone, as hardware rivals seek to displace the smartphone as the default consumer device.”

Cook’s tenure had other missteps: a decade-old electric vehicle project that Apple scrapped in 2024 just as they were taking off in China. The company also failed to launch Apple Maps in 2012, months after Cook took over, leading to the departure of Scott Forstall, a close associate of Jobs and head of software.

Read more: John Ternus will lead Apple into the AI ​​era

Apple’s bet on the Vision Pro augmented reality headset, which debuted for a whopping $3,499 in 2023, has failed to generate strong sales and its products have lagged behind in AI features, including delays in revamping Siri.

“AI is the biggest challenge for Ternus. Apple needs to show that AI will be more than an app on the iPhone, more than Siri,” said Brian Mulberry, chief market strategist at Zacks Investment Management, which owns Apple shares.

“Beyond AI, the pressure to continue removing manufacturing from China without putting pressure on margins is a difficult task to undertake, but part of that process is already underway,” he said.

Apple’s dependence on China generated decades of manufacturing efficiency, but rising tensions, tariffs and supply chain disruptions between China and the United States exposed the risks of concentrating production in a single country, prompting the iPhone maker to expand manufacturing in India and other countries.

Those measures, including manufacturing most U.S.-bound iPhones in India by the end of 2026 and assembling certain devices like AirPods and iPads in Vietnam, have helped Apple better navigate the tariff storm that upended businesses across the United States.

Cook created a broader leadership team and reshaped Apple as an institution, giving it room to focus on strategy and resource allocation while maintaining a lower public profile, said Bill Birmingham, CEO of REX Financial.

“This gave Cook room to make unpopular decisions and even be ruthless outside the spotlight.”