Apple CEO John Ternus Wants a Faster, Bolder $5 Trillion Empire
A month into the job, John Ternus is already moving to remake Tim Cook’s Apple. The new CEO is cutting layers of middle management, has dismissed a number of engineering program managers in the hardware division and wants to break Apple’s spring-and-fall launch rhythm in favor of releasing products year-round, Bloomberg reported Tuesday (Sept. 29). According to the report, that includes eliminating some middle-management positions to reduce the layers between engineers and senior executives, and Apple has already dismissed a number of engineering program managers in its hardware division over the past two weeks. Ternus also wants Apple to become more experimental, especially amid the race in A.I., and to rely less on its traditional spring-and-fall launch calendar in favor of releasing products throughout the year. Apple shares fell about 2 percent Tuesday morning on the report.
Leaner isn’t a new idea for Ternus. As head of hardware engineering, Ternus told employees at an all-hands meeting that Apple should hire fewer people and ask more of its existing engineers, at one point presenting a slide charting annual headcount growth, according to Bloomberg.
The larger test may be how those changes sit with Cook, who led Apple for the last 15 years and has moved out of the spotlight into a more advisory role as executive chair, where he also handles government relations. David Yoffie, a Harvard Business School professor who has written multiple case studies on Apple and has been watching the CEO handover closely, recently told The New York Times that the real “test for Mr. Ternus and Mr. Cook, will come if they diverge on strategy or their vision for Apple.
“The first month of a new CEO, you don’t see any tension whatsoever,” Yoffie told Observer, “but six or nine months later, if there are things that the new CEO wants to do which really make the executive chair and former CEO uncomfortable, that’s where the tensions get created.”
On Sept. 9, Ternus took the stage at the Steve Jobs Theater for his first keynote as CEO. He didn’t try to be Cook or Apple’s storied founder, Steve Jobs. He revived Jobs’ characteristic “one more thing” hook, but otherwise stuck largely to the playbook that Cook used for 15 years, unveiling the foldable iPhone Duo, new generations of the iPhone and Apple Watch (with a spooky new recording setting) and new AirPods.
In a staff memo after the event, Ternus said the launch was “phenomenal” and wrote that he was “excited about what lies beyond that, including the incredible products already in the works.”
Wall Street has been mixed on his leadership so far. Apple’s stock followed the keynote with the typical buy-the-rumor, followed by sell-the-news drop. Then on Friday, a federal jury in San Diego found that Apple owes Taction Technology more than $5.7 billion for infringing two patents on haptics technology used in the iPhone and Apple Watch; Apple has said it will appeal. The stock slid on Monday.
The open question is whether Apple, under Ternus, can surprise again and keep growing its nearly $5 trillion market cap while innovating in ways that align with the brand’s public ethos. A month in, Yoffie says, those answers remain unclear.
Apple has a lot on its plate, with reportedly more than 40 product launches planned under Ternus, and Yoffie says that could be a real make-or-break moment for the brand-new CEO. If the products are all tied to or around the iPhone, Yoffie says, “that’s just an evolution of where we already are. It’s not going to be something new.” But if Ternus takes Apple in a significantly different direction, such as moving the company toward becoming a tech conglomerate like Amazon, that would be a step change. Yoffie says he has no information that such a shift is imminent, and that Ternus will be evaluated on growth and margins, not just a large product pipeline.
“I think he will also be measured on whether or not Apple is going to be perceived as an innovator again, as opposed to a company that has done brilliantly in extending the world’s most successful product, which is the iPhone,” Yoffie said, noting that Apple has been trying to protect its margins by raising prices, but it’s unclear how much more consumers will tolerate.
Ternus spent many of his 25 years at Apple running product, and Yoffie says that background opens a few possibilities. As SVP of hardware engineering, Ternus oversaw products including the original AirPods, the iPhone Air, the suite of M4 Macs, and Apple’s first Macs with Apple silicon. New releases from Apple could include more deeply integrated A.I. that runs on Apple devices. Apple’s revamped Siri is built on Google’s Gemini models under a multiyear deal the companies announced in January, with OpenAI’s ChatGPT available as an opt-in integration, rather than on a foundation model Apple controls itself. Apple has largely lagged behind the industry on A.I., in part because its privacy commitments limit the company’s ability to use its own data for training. Yoffie sees the bigger question as whether Ternus pushes Apple to develop its own A.I., particularly for on-device features where Apple’s chip expertise could be an advantage, or keeps relying on partners.
Yoffie also said Apple could move into an entirely new product category, which led us to ask about the doomed Apple Car, killed in February 2024. Yoffie said he did not expect the company to move back into that space, given the tremendous cost and how much harder it is to enter the market now, especially with players like Waymo and Tesla on the roads. Another possibility, he said, is an entirely new kind of device, especially one that evolves out of the partnership between Jony Ive, the famed designer of the iPhone and the Ferrari Luce, and OpenAI.
It’s still very early in Ternus’ tenure, but the new CEO has his work cut out for him. “I would measure him on whether he has actually brought the next two or three innovations to the market and commercialized them in ways that Apple had done brilliantly for the last 25 years,” Yoffie said. “All the metrics have been heading in the right direction. So that gives John the ability to be patient and to be thoughtful, not to do any knee-jerk reactions, and that’s what I would expect,” at least in the short term, he said.
