John Ternus officially assumed the role of Chief Executive Officer at Apple on September 1st, becoming the third leader of the world's most valuable tech company, following in the footsteps of Steve Jobs and Tim Cook. According to recent analysis, Ternus faces one primary challenge: how to steer this consumer electronics giant, historically built on hardware prowess, toward a renewed competitive edge in the age of artificial intelligence.

His first major test arrives almost immediately with the September iPhone launch event and the full-scale deployment of the new Siri AI. This rebuilt voice assistant is positioned as a direct competitor to ChatGPT. While early reviews have been somewhat positive, whether it can overturn Siri's long-standing reputation for being unreliable remains an open question. Adding another layer to the transition, Tim Cook isn't fully departing. He will stay on as Executive Chairman, managing Apple's relationships with both the Trump and Chinese governments, and will be available to advise Ternus as needed.

This leadership transition carries significant weight for Apple shareholders. The product pipeline under Ternus includes the first foldable iPhone, AI-enabled smart glasses, and smart home displays. Whether these products deliver on their promise will directly determine Apple's ability to hold its ground in the AI hardware race. At the same time, Apple's perceived lag in AI, increasing talent attrition, and a slowdown in its services business create a triple burden the new CEO must tackle immediately.

A Critical AI Stumble

Apple's positioning in generative AI is considered notably behind the curve. After ChatGPT ignited the AI boom in late 2022, Apple initiated substantial investment, including building its own large language models, hiring AI talent, and scouting acquisitions. However, the first version of Apple Intelligence underperformed, and a major AI acquisition failed to materialize. Cook subsequently replaced Apple's AI head and reorganized the Siri team.

In a highly symbolic move, Apple last year abandoned its plan to develop its own models, opting to license Google's Gemini technology as the foundation for the new Siri. This decision sparked significant internal dissent within Apple's large language model team, leading to the departure of several key members, including the team lead, who moved to competitors offering higher compensation.

The new Siri AI is slated for a full launch in September. Apple's long-term monetization strategy involves charging users or developers, or through integration with third-party apps. However, for this model to be viable, Siri must first earn user trust.

Betting on AI-Powered Devices

Ternus has spent 25 years at Apple, starting as a Mac engineer and eventually overseeing iPad, AirPods, iPhone, and the entire hardware engineering division, earning recognition as a top hardware expert. His new product pipeline is described as "extraordinarily ambitious": this fall, we can expect the first foldable iPhone and a smart display device that can recognize speakers and personalize content. Future plans include AirPods with cameras, smart glasses, home security systems, a home monitor with a robotic arm, and a wearable camera pendant.

Notably, Ternus has shown a lukewarm attitude toward the Vision Pro mixed-reality headset championed by Cook. According to insiders, he believes the device is too bulky and expensive to become a mainstream product. Apple has recently reduced staff on the Vision Pro team across areas like device security, audio engineering, Siri integration, testing, and operating systems. The internal N50 smart glasses project, which Ternus supports, is planned for next year. However, if the broader head-mounted device category fails to gain market traction, he hasn't ruled out scaling back this segment, which could affect the next-generation Vision Pro (codename N224), expected as late as 2028.

At the intersection of AI and hardware, Ternus has also pushed to integrate AI into Apple's own product development processes, launching an AI platform during his tenure as hardware chief to accelerate development and improve hardware testing efficiency.

The Silent Threat of Talent Loss

Apple's appeal as a top destination for hardware talent is waning. Hundreds of former Apple employees now work in OpenAI's hardware division, leading Apple to file a lawsuit alleging trade secret theft. Ternus was one of the decision-makers approving this legal action.

To retain key personnel, Ternus distributed bonus packages worth hundreds of thousands of dollars to several members of the iPhone design team. He also personally intervened in retention efforts, instructing iPhone design head Richard Dinh to meet with an engineer from Singapore and offer a promotion and raise. Despite this, the employee ultimately chose to join OpenAI.

Insiders suggest that up to half of Apple's executive team could leave within the next few years. The most critical potential loss is Chief Hardware Officer Johny Srouji. The 61-year-old reportedly expressed a desire to leave to Cook last year but was persuaded to remain after being offered expanded responsibilities and a role in the CEO transition. However, sources indicate he may still depart within a year or two. The heads of marketing, services, and retail, each with roughly four decades at Apple, may also retire in the coming years.

A Gradual Power Transfer

Tim Cook, who led Apple for 15 years, grew revenue from approximately $100 billion to $416 billion and increased the market value about 15-fold. He bid farewell at a dinner hosted by colleagues at Apple Park on August 23rd, with a performance by OneRepublic. But this goodbye is not a complete farewell.

Cook has told Ternus he will continue to handle relations with the Trump administration and the Chinese government, and is willing to take on any other responsibilities the new CEO deems necessary. He told employees that Apple will always be his "first priority" because he "can't imagine it any other way."

According to reports, Apple internally compares this partnership to that of Amazon's Jeff Bezos and Andy Jassy as the closest model. However, the cautionary tale of Disney also looms large, where Bob Iger clashed with his successor Bob Chapek after staying on as a consultant, eventually returning as CEO. Managing this gradual power transition effectively will largely determine whether Ternus can match Cook's success.

For now, Ternus has begun taking the lead in communications with Wall Street analysts and is gradually assuming a dominant role in the 2027 planning meetings he attends with Cook. The September 9th iPhone event will be his first appearance as CEO, marking the first time in 15 years that Cook will not be the central figure on that stage.