For fifteen years, Tim Cook ran Apple with the precision of a Swiss watch. He turned a company already famous for its gadgets into one of the most valuable businesses in human history, growing its market value from roughly $350 billion to an almost incomprehensible $4 trillion.
He built a supply chain so efficient it was studied like scripture at business schools. He quietly expanded Apple’s services division, think App Store fees, Apple Music, iCloud subscriptions, until it was generating over $100 billion every year. By the time Cook announced on April 20, 2026, that he would step down as CEO and shift to an Executive Chairman role from September 1, most observers agreed that his mission has been accomplished.
His chosen successor is John Ternus, a 50-year-old engineer who has spent the last 25 years as the quiet force behind virtually every piece of hardware Apple has released. The appointment signals something deliberate. Apple is not turning to a finance wizard or a marketing genius. It is turning to someone who has spent his career thinking about how things are built.
The man behind the machines
Ternus graduated from the University of Pennsylvania in 1997 with a degree in Mechanical Engineering and Applied Mechanics. He was a competitive swimmer at university, winning events in the 50-metre freestyle and 200-metre individual medley. His final undergraduate project was a mechanical feeding arm controlled by head movements, designed for people with quadriplegia, an early sign of someone drawn to engineering with purpose rather than just performance.
Before Apple, Ternus spent four years at a startup called Virtual Research Systems, designing early virtual reality headsets. That experience, building hardware meant to sit on someone’s face and convincingly alter their perception of the world, planted seeds that would prove relevant decades later.
He joined Apple in 2001 at 26. One early story captures his character well. During production of the Apple Cinema Display, a factory mistakenly milled 35 grooves into the back panel instead of the specified 25. To most eyes, the two versions looked identical. Ternus insisted on correcting the manufacturing process anyway. That is not the instinct of someone who accepts good enough.
Over the years, Ternus rose steadily. He became Vice-President of Hardware Engineering in 2013 and Senior Vice- President in 2021. Along the way, he oversaw every generation of the iPad, engineered the miniaturisation of AirPods, and took control of iPhone and Apple Watch hardware.
His most significant achievement, however, was leading the Mac’s transition away from Intel processors to Apple’s own custom-designed chips, the M-series. This was not a minor tweak. It was the equivalent of replacing the engine in a car while the car was still driving. The result was a line of laptops and desktops that outperformed competitors at a fraction of the power consumption, and it gave Apple total control over one of the most critical components in its products.
His most recent hardware statement, before being elevated to CEO, was the March 2026 launch of the MacBook Neo. Priced at $599, this was Apple doing something it almost never does, which is competing on price. The device made deliberate compromises. It capped memory at 8GB, offered only two USB ports, and dropped certain display refinements. But it kept the aluminum build, the crisp Liquid Retina screen, and Apple’s powerful A18 Pro chip.
The result was the best Mac launch week for first-time buyers in the company’s history. Ternus understood that there was an enormous market of students and budget-conscious consumers who wanted the Apple experience but could not justify paying premium prices.
To ensure the hardware pipeline does not suffer in Ternus’s absence from that role, Apple elevated Johny Srouji, the architect of Apple Silicon, to a new position of Chief Hardware Officer, overseeing hardware engineering, chip design, and platform architecture.
The gap that cannot be hidden
Here is the uncomfortable truth about Apple in 2026. The hardware is extraordinary. The software intelligence is not.
While Apple was refining aluminum finishes and perfecting chip architecture, the rest of the technology world was pouring money into artificial intelligence (AI) at a scale that is difficult to fully absorb. In a single quarter of 2025, companies like Google, Meta, Microsoft, and Amazon collectively committed an estimated $120 billion to AI infrastructure, covering data centres, custom processors, and the enormous computational power required to train and run large AI models. On an annual basis, their combined projection exceeds $660 billion. Google alone invests between $91 billion and $93 billion per year into this infrastructure.
Apple spent approximately $14 billion on AI-specific investment over the same period.
That is not a small gap. The companies spending more are building AI systems that can reason through complex problems, understand images and audio in real time, execute multi-step tasks across multiple applications, and improve themselves continuously through interaction with hundreds of millions of users.
Meanwhile, Siri, Apple’s voice assistant, which was genuinely pioneering when it launched in 2011, remained stuck in an architecture built around matching voice commands to pre-programmed responses. Ask Siri to set a timer or call a contact, and it performs reliably. Ask it to do anything that requires genuine reasoning or contextual understanding, and the gap between Apple and its competitors becomes embarrassingly apparent.
Apple’s internal culture also worked against it. Hardware engineering is a world of certainties. A product either functions within its specifications, or it does not. There is no acceptable rate of random failure. Artificial intelligence is the opposite of that.
Large language models, the kind powering Google’s Gemini or OpenAI’s ChatGPT, are probabilistic. They do not compute a single correct answer. They generate the most statistically likely response based on patterns learned from vast amounts of training data. They make mistakes. They occasionally produce confident nonsense. Crucially, they improve not through laboratory refinement but through deployment to real users at massive scale.
Apple, under Cook, was simply not culturally equipped to release something that might occasionally embarrass the company. So, features announced at Apple’s developer conferences in 2024 and 2025 were delayed, scaled back, or launched in such a limited form that even loyal Apple users struggled to understand what the fuss was about.
The honest acknowledgement of this situation led to a significant and somewhat humbling strategic decision. In early 2026, Apple finalised a multi-year deal with Google, estimated at $1 billion annually, to embed Google’s Gemini AI architecture directly into the iOS ecosystem.
As things stand today, Apple does not need to win the AI race. It just needs to ensure that whatever AI the world uses, Apple gets a cut of the subscription fee.
Through its App Store commission structure, 30% in the first year and 15% thereafter, Apple collected nearly $900 million from generative AI applications in 2025 alone, primarily from ChatGPT, with contributions from Claude and Grok.
In 2026, that figure is projected to exceed $1 billion. Google, Meta, and Microsoft are spending hundreds of billions of dollars building AI capabilities, while Apple passively monetises their distribution. It is, from a purely financial perspective, an almost elegant arrangement.
This dynamic gives John Ternus something invaluable as he assumes the CEO role. Namely, time. Apple’s core financial machinery is not at risk. The services division is robust. The installed base of 2.5 billion active devices is loyal and deep.
The App Store is a toll booth on the most lucrative stretch of the digital economy. Wall Street largely concurred. When the Cook-to-Ternus transition was announced, Apple’s stock barely moved, settling after a minor fluctuation of between 1% and 2.5%.
Morgan Stanley described the transition as “‘evolutionary rather than transformational’.” Wedbush Securities maintained an Outperform rating with a $350 price target.
What Ternus must do
The Google partnership solves an immediate problem but creates a long-term one. Apple’s core identity is inseparable from its control over every layer of the user experience. Ceding the reasoning engine of its products to a competitor is a compromise that may be necessary today but cannot be permanent.
Apple has an internal initiative, codenamed Project Ajax, aimed at building its own frontier-scale AI model. Rumours of custom M5-based AI server chips for 2026 and 2027 deployment suggest this project is advancing. By the end of the decade, Apple needs to own its cognitive infrastructure the way it owns its silicon.
Culturally, Ternus must help Apple’s engineering teams become comfortable with imperfection in a specific, bounded way. The hardware can and should remain flawless. But AI features must be allowed to ship, iterate, and improve through real-world use rather than retreating into development cycles that last years. These are two different disciplines, and Apple must learn to hold both simultaneously.
The wearables and smart home roadmaps cannot slip further. Smart glasses represent the most significant new hardware category since the smartphone, and Apple cannot afford to be two or three years behind Meta when it launches. The HomePad needs to reach consumers before Google Nest and Amazon Alexa become so embedded in households that switching feels impossible.
Apple Watch needs to evolve from an excellent data collector into an intelligent health companion.
Finally, the developer ecosystem requires urgent attention. Apple’s Foundation Models framework, the tools it provides to outside developers for building AI-powered apps, is currently seen by many in the industry as too restrictive. The local models are too small. The safety guardrails block too many legitimate uses. The rate limits prevent the kind of intensive querying that makes agentic applications possible. If developers cannot build the next generation of AI-native software for iPhone, they will build it for Android, and the users will follow.