John Ternus officially took over as Apple's CEO on Tuesday, succeeding Tim Cook after his 15-year tenure. Ternus, a 50-year-old hardware engineer and a 25-year Apple veteran, inherits a company facing significant pressure to innovate in artificial intelligence and address a fragile global supply chain. Analysts like Brian Mulberry from Zacks Investment Management emphasize that AI is Ternus's biggest challenge, stating Apple needs to prove AI is more than just an app or Siri.
Under Cook, Apple transformed from a $350 billion company to over $4.5 trillion. Annual sales grew from $108 billion to $416 billion in the last fiscal year, with profits quadrupling to $112 billion. Cook's strategy also established a recurring revenue stream from Apple's 2.5 billion installed iPhone user base, which has outpaced hardware growth. Ternus, known for his work on Apple's in-house chips and overseeing devices like the "skinny" iPhone Air and MacBook Neo, is expected to continue focusing on hardware innovation, despite some commercial flops like the iPhone Air and the Vision Pro headset, which debuted at $3,499 and saw disappointing sales.
Beyond AI, Ternus also faces the challenge of diversifying Apple's manufacturing away from China without impacting margins. This process is already underway, with Apple planning to make most U.S.-bound iPhones in India by the end of 2026 and assemble devices like AirPods and iPads in Vietnam. Ternus's annual salary was increased to $3 million, with an annual equity award target of $55 million starting in 2027, primarily tied to stock performance. In comparison, Cook's annual salary will be $2 million, with his total compensation for 2025 exceeding $74 million, dropping to an estimated $47 million for the coming year. Johny Srouji, Apple's top silicon engineer, was promoted to chief hardware officer, indicating a continued focus on in-house chip development and hardware excellence.
