John Ternus, 51, has worked at Apple for half his life. For over 25 years he has helped build the iPad, AirPods, and many generations of iPhones and Apple Watches. Colleagues describe him as collaborative, risk-averse, detail-oriented, and even-keeled; a “product guy” who is a safe pair of hands.
Now those hands will guide the reins of the world’s third most valuable company, after he was named the incoming CEO on Monday.
On April 1, Apple celebrated its 50th birthday. Founded in Steve Jobs’ bedroom in 1976, and then rescued from the brink of bankruptcy in the Nineties, Apple has grown into a $4 trillion global behemoth under the steady leadership of Tim Cook.
But as Tim Apple makes way for John Apple, the company is facing two massive strategic challenges in AI and hardware.
Apple is undeniably lagging behind in the AI race. Despite being probably the world’s most famous virtual assistant, Apple’s Siri cannot match the capabilities of OpenAI’s ChatGPT and Anthropic’s Claude. Siri is now powered by Google’s Gemini, and the ‘Apple Intelligence’ software suite has not been successful.
Behind this weakness, though, is a subtle strength. For all that generative AI is changing the world, we still access it through the same old devices that Apple builds. Apple takes a cut whenever anyone subscribes to ChatGPT or Claude through their iPhone app. As Axios recently put it, “Apple could win the AI race without running.”
Appointing Ternus suggests Apple will lean into this advantage, doubling down on consumer hardware.
Apple’s microchips are unusually well suited to training and running AI. According to Bloomberg, Ternus was “pivotal” in shifting the company away from using Intel processors to building its own Apple Silicon line. Now those chips have made Apple’s cute yet powerful Mac Mini a hot commodity for AI entrepreneurs and hobbyists — causing extreme shortages and shipping delays.
Between the ongoing bottleneck on building new server farms and the growing bipartisan backlash against them as eyesores with health issues, offloading some AI processing to a consumer’s own computer may be a way forward for tech giants.
Rival tech giants have plowed billions into building new data centers and investing in AI experience. Apparently to compensate, they are laying off hundreds of thousands of employees. Apple has largely avoided this.
In the long term, however, there is another looming question for the company.
Once, computers were room-sized colossi that lived at your office or university, controlled by typing commands into a text-only terminal. Then came personal computers, with a virtual ‘desktop’ you could navigate using a mouse. Now we swipe and tap on smartphones with ultra-sensitive touchscreens.
So what will be the next shift in how we interact with computers? Some believed it would be voice control, like Amazon’s Alexa. Others bet on augmented reality, which uses special headsets to overlay virtual objects onto the physical world. Still others, notably Facebook boss Mark Zuckerberg, believed we’d all migrate to an interconnected virtual reality dubbed “the metaverse.” (I actually tried living there for a week.)
Today the AI race has deferred this question, but not solved it. Even Zuckerberg, who renamed his entire company Meta as a symbol of his commitment, is backing away from AR and VR at least for now after losing roughly $80bn.
Apple has more institutional expertise in this area than perhaps any other consumer electronics company. Though its Vision Pro AR/VR headset, priced at $3,500, has been a commercial flop, it may yet prove a strategic victory if it helped Apple develop knowledge and capability for a future AR boom.
Even so, the competition is stiff — not least from Apple’s own former design guru Jony Ive, who masterminded the aesthetics of the iPod and the iPhone. Together with another top Apple designer, Tang Tan, he is working with OpenAI on some kind of mysterious AI-first screenless device. Whether it will change the world or flop spectacularly is anyone’s guess.
This is where Apple’s two challenges merge into one. Right now, ironically, AI chatbots have returned us to one of the earliest computer interfaces: typing text commands, and getting text back. But how long will that last? How might we interact with AI — which increases the pace of technological change — in five years, or fifteen?
Apple only needs to be best, not first, with an AI-focused product. The iPhone wasn’t the earliest smartphone; it just combined previous innovations into an elegant package that allowed them to break out beyond gadget enthusiasts.
Yet no empire lasts forever. Many critics already fault Apple for falling into a steady pattern of incremental change, while failing to produce another breakthrough device.
Most companies never launch a revolutionary product; Apple has been lucky enough to do it several times. Will Ternus’s safe, steady hands be fast and nimble enough to bottle lightning again?
