New cook takes bytes of Apple@50

Will Ternus use ingredients like innovation, vision, and design?

It is official. Three weeks after Apple turned 50, a new CEO is in place. He is not a visionary like Steve Jobs, although the outgoing Tim Cook, who will be executive chairman, describes him as one. He is not a supply chain expert like Cook. John Ternus, the new CEO-cook at Apple, who is likely to come with new recipes for apple phones (no pies), is someone with a “mind of an engineer, soul of an innovator, and heart to lead with integrity and honour.” This is how Cook describes Ternus. Coming from a product-design background, the latter hopes to help Apple to “escape the iPhone’s gravitational pill.”

Despite Cook’s success as the chief chef for 15 years, experts highlight his limits. Ternus needs to turn the firm on its head, as opposed to how Cook consolidated the empire, and bring back the excitement, awe, and experiment of the past that once defined Apple. According to a former executive, Jobs was a “visionary,” and Cook was an “operations guy.” But now, the firm needs a brilliant scientist, who can not only design new products, and go beyond the iPhone, but successfully embed software with hardware in the fast-changing AI world. Apple needs someone who can take risks, who can experiment without fear.

According to AI-generated search, one of the biggest challenges before Ternus is to gather speed, stop playing the catch-up game in the AI race, and race ahead of the others. Until now, critics labelled Apple as “‘lazy’ or too cautious, relying on on-device processing while others built massive generative AI capabilities.” If this strategy needs to be successful, the new CEO must “prove that its on-device AI… is superior to cloud-based solutions.” Ergo, Apple needs an integration between hardware and software, which requires someone adept in product development and design, rather than an ops-logistics-supply chain guy.

One cannot negate Cook’s culinary achievements at Apple, especially what he did with money, wealth, and financial power. In 2018, the firm became the first public firm to be valued at $1 trillion, which increased four-fold in eight years. The annual profits were up four times, even as the iPhone family captured the hearts, minds, and pockets of millions across the world, from America to Asia. He built a robust global supply chain, with a nerve nucleus in China, and then rebuilt it after the pandemic, with a dual-op structure, or India as a counter to China.

Yet, the taste of success felt a bit stale at the end of 15 years. The ingredients worked but something was amiss. Gone was the excitement, and spirit of experimentation. The designs were incremental, though each iPhone model had buyers queue up overnight. It was as if the zest was gone, as people developed and delivered variations after variations. As one expert comments, Cook could not do what Jobs did, i.e., deliver another iPhone-like product that “would give Ternus another 20 years of success.” So, Ternus must start afresh, maybe with entirely new ingredients, even as he continues with the existing recipes.

Possibly, there is some sense in leaving aside the temptation to be incremental, without giving it up as it carries a momentum, and search for the next, new growth engine. It cannot merely be rooted in a product, or design, which is what Jobs did. But Ternus has to create a new imagination, a new way of thinking, which Jobs did, but through combined and collective breakthroughs in hardware, software, and design. Apple needs new products like foldable phones and wearables. Apple needs to up the AI tempo, instead of relying on Google and OpenAI, which are integrated into the former’s operating systems.

Rapid innovation is how Apple started. The strengths of discipline, polish, and control helped Cook to expand the geographical and volume reach of the recipes. Ternus possibly, says an analyst, needs to return to the innovation space, but in a broader context. He needs to become an explorer in an uncertain world, like Jobs was. But for the latter, the world was his oyster, as there were too many spaces to fill on the tech plate. In Ternus’ case, the plate is full, and overcrowded. Anything new tends to topple over, unless it displaces the existing offerings.

Maybe Ternus is the right man for the right job. As a hardware engineer, he has worked on most of the firm’s products such as iPhone, iPad, Mac, AirPods, and Apple watch. His team was responsible for iPhone Air, and MacBook Neo. “While Tim Cook’s tenure was defined by operational excellence, and supply chain dominance, Ternus’ represents a shift-back to a product-centric leadership style,” states an AI search. This is crucial as the new CEO is known for his hands-on engineering-first approach. The flip side: he cannot dump the existing ingredients, as he introduces new ones. He cannot give up on existing customers.

Once the change in CEO was announced, Apple shares went up for four dollars, and settled down by a dollar. In effect, it was up one per cent. However, the expectations are of a dip of a dollar or two in the next trading session. The fact remains that this is not an ordinary change of guards. It is not a continuation, or a seamless transition. Ternus is the new shock, a large dose of adrenaline that is being injected into Apple. This is not a small bite, or byte, as you see on the logo. It represents a big byte, which will take away a large chunk of what Apple is.

There is no evidence for it but it seems logical to assume that once several veterans felt that they were out of the CEO race, they opted out of the firm. The recent past witnessed the departure of several senior executives, which included the former COO, Jeff Williams, who was widely tipped as Cook’s successor, and others who headed the AI and legal teams. Indeed, these are the teams that will prove crucial and critical for Ternus. Hence, he needs to get appropriate people, or find them within the firm. Without the right people, the products will be bereft of innovations, and software will seem soulless.

Let us not forget about the regulatory hurdles and barriers in this 100-metre sprint, and dash for the tape. In India, there is the possibility of a $38-billion fine. In China, there are competitors propped up by the State. In the US, there is an antitrust trial.