Tim Cook made Apple a $4.5 trillion machine. Can Ternus make it innovative again?
The outgoing CEO leaves behind extraordinary financial growth, but Apple’s struggles with AI, new hardware categories and manufacturing dependence present his successor with a formidable challenge.
When Tim Cook took over as Apple’s CEO, he did not try to fill the big shoes of its legendary founder and product visionary, Steve Jobs. Instead, he followed Jobs’ advice: “Never ask what I would do, just do the right thing.”
Fifteen years later, after taking the iPhone maker from a $350 billion company to a more than $4.5 trillion behemoth, Cook will pass the baton to Apple hardware chief John Ternus, who will steer the company into the AI era.
Cook will become executive chairman on September 1, guiding Apple’s dealings with policymakers amid tense relations between its home market, the United States, and China, where many of its products are made.
The transition caps one of the most consequential CEO tenures in corporate history.
Unlike Jobs’ product-design genius, Cook rose through Apple’s ranks by making the company’s supply chain the envy of the manufacturing industry. As CEO, he applied that operations-first mindset to taking Apple’s cutting-edge products to the masses.
In a defining example of his business acumen, Cook recognized that Apple could continue making money from customers long after they bought an iPhone, turning its 2.5 billion-device installed base into a recurring-revenue machine. That business has outpaced growth in the company’s hardware business in recent years.
Apple’s annual sales rose from $108 billion at the start of Cook’s tenure to $416 billion in the last fiscal year, while profit grew more than fourfold to $112 billion.
Its wearables business, which includes Cook-era products such as the Apple Watch and AirPods, generated $35 billion in sales in fiscal 2025.
“Not only did Cook create his own path of operational and supply chain success, but he also created a ‘values-driven’ culture within Apple,” said Christopher Brown, a financial adviser at private wealth management firm Synovus Securities, which holds Apple shares.
“What followed was a consumer brand loyalty and dependency flywheel that generated trillions of dollars in revenue.”
Critics have long accused Apple of losing its innovation edge during the Cook era. They argue that Cook has failed to answer what comes after the iPhone, as hardware rivals look to displace the smartphone as the default consumer device.
Cook’s tenure had other setbacks. Apple scrapped a decade-long electric-vehicle project in 2024, just as EVs were taking off in China. The company also famously botched the launch of Apple Maps in 2012, months after Cook took charge, leading to the departure of Scott Forstall, a close Jobs collaborator and Apple’s software chief.
Apple’s bet on the Vision Pro augmented-reality headset, which debuted at a hefty $3,499 in 2023, failed to generate strong sales. The company has also lagged in AI features, including delays in revamping Siri.
“AI is the single biggest challenge for Ternus. Apple needs to demonstrate that AI will be more than an app on the iPhone, more than Siri,” said Brian Mulberry, chief market strategist at Zacks Investment Management, which owns Apple stock.
“Beyond AI, the pressure to continue to remove manufacturing from China without pressuring margins is a tall task to undertake, but part of that process is already underway,” he said.
Apple’s dependence on China delivered decades of manufacturing efficiency, but rising Sino-U.S. tensions, tariffs and supply-chain disruptions exposed the risks of concentrating production in a single country. The company has responded by expanding manufacturing in India and other countries.
Those moves include plans to make most U.S.-bound iPhones in India by the end of 2026 and assemble certain devices, including AirPods and iPads, in Vietnam. The shift has helped Apple better navigate the tariff turmoil that disrupted businesses across the United States.
Cook also elevated a broader leadership team and recast Apple as an institution, giving himself room to focus on strategy and resource allocation while maintaining a lower public profile, said Bill Birmingham, managing director at REX Financial.
“This gave Cook space to make unpopular decisions and even be ruthless out of the spotlight.”
