John Ternus officially became Apple’s CEO on Sept. 1, succeeding Tim Cook one week before the company is expected to unveil its first foldable iPhone. The launch will offer an early test of how the longtime hardware engineer intends to guide a company valued at roughly $4.6 trillion through rising component costs and intensifying competition in artificial intelligence.
The new boss
Ternus, 51, joined Apple’s product design team in 2001 and has spent the last 25 years climbing the ranks, becoming senior vice president of Hardware Engineering in 2021. He takes over from Cook, who led the company for 15 years and will remain as executive chair.
In his farewell note to employees, Cook called his successor “brilliant and wonderful and capable,” adding that “few people understand what it takes to build products that change the world the way John does.”
The new CEO inherits a company that has seen its value skyrocket under Cook, with the iPhone remaining its largest source of revenue. But Ternus also takes over at a moment of significant uncertainty, with Apple playing catch-up in AI and facing a global component shortage that is driving up smartphone prices.
For Apple’s carrier, reseller, supplier, and enterprise partners, Ternus’ decisions could affect device pricing, product availability, upgrade cycles, and the services opportunities created by Apple’s expanding AI strategy.
The hardware man’s software problem
Ternus has spent his career focused on the physical — the screws, the aluminum, the titanium. In his 2024 commencement speech at the University of Pennsylvania, he recalled a formative moment in his first year at Apple, using a magnifying glass to count grooves on a screw head at a supplier facility.
That obsessive attention to detail served him well. He oversaw hardware engineering across the iPad, AirPods, iPhone, Mac, and Apple Watch, and helped introduce innovations like a recycled aluminum compound and 3D-printed titanium in the Apple Watch Ultra.
But the challenge now is software. Apple has stumbled in the AI race, with its Siri assistant widely seen as lagging behind competitors like OpenAI’s ChatGPT. The company removed a 2024 advertisement promoting personalized Siri capabilities that were not yet available. Apple also temporarily disabled AI-generated notification summaries for news and entertainment apps after some summaries produced inaccurate headlines. Apple has since selected Google’s Gemini models to help power its revamped Siri and has begun rolling out the assistant in beta.
“The biggest challenge for Apple as Ternus takes over is how to keep the company relevant in the age of AI,” Nabila Popal, senior research director at IDC, told CNET.
A foldable gamble and a pricey future
Next week’s launch event is expected to feature the long-rumored foldable iPhone, although Apple has not confirmed the device. IDC reportedly projects that Apple could ship more than 17 million foldable iPhones in 2027 and capture about 40% of the foldable-phone market. However, a CNET survey found that 75% of US adults expressed no interest in buying one. Counterpoint Research reportedly expects the device to represent only about 3% of Apple’s iPhone shipments, with pricing estimates generally exceeding $2,000.
Then there’s the memory shortage. The rapid expansion of AI data centers has contributed to rising NAND and DRAM prices. Counterpoint Research estimates that component costs for certain iPhone 18 configurations could increase by $200–$250, although Apple has not announced prices or said how much of that increase it will pass on to buyers. Counterpoint analyst Yang Wang called the September launch “an important first test for John Ternus as CEO.”
Channel Insider analysis: The paradox of the product guy
The choice of Ternus puts a product engineer back at the center of Apple’s leadership. But there’s a paradox here that’s worth noting. Apple’s greatest product breakthroughs under Steve Jobs and Cook were as much about experience design as they were about hardware. The iPod worked because of iTunes. The iPhone worked because of the App Store.
Ternus is inheriting a company where the next big thing—AI—is largely invisible. It doesn’t live in the grooves of a screw or the grain of aluminum. It lives in models, data centers, and user interfaces. The very trait that made him successful—a mastery of the physical—may be the one that needs to evolve most quickly.
His commencement advice to engineers—“Always assume you’re as smart as anyone else in the room, but never assume that you know as much as they do”—will be tested not by a supply chain crisis or a hardware failure, but by the much more elusive task of making software feel magical again.
What this means for Apple partners
For Apple’s carrier, reseller, and enterprise partners, the immediate questions involve pricing and availability. Rising component costs could affect reseller margins, while a foldable iPhone costing more than $2,000 may depend heavily on carrier financing, trade-in offers, and other incentives.
Apple’s AI strategy could create a larger long-term opportunity. A successful Siri overhaul may encourage device upgrades while generating demand for deployment assistance, employee training, security guidance, and integration services. Next week’s launch should offer the first indication of how Ternus plans to balance premium hardware, partner economics, and Apple’s need to close its AI gap.
As the new CEO put it in his letter to employees Tuesday: “I’m just as excited about what lies beyond [next week’s launch], including the incredible products already in the works and the ones we haven’t even imagined yet.” For a hardware engineer stepping into a software-defined world, that imagination will need to stretch further than ever before.
Read more: Apple’s record revenue came with warnings about chip constraints, adding to the pricing and supply-chain pressures facing John Ternus.