--- title: "\"Hardware veteran\" takes over as CEO, will Apple's AI answers be written by chip genes?" type: "News" locale: "en" url: "https://longbridge.com/en/news/283454295.md" description: "Tim Cook announced that he will step down as CEO of Apple on September 1, leaving behind a business empire valued at nearly $4 trillion. His successor, John Ternus, faces challenges, especially in the field of artificial intelligence, as Apple needs to leverage its hardware genes to meet the future demands of AI. Apple's AI strategy tends to avoid massive capital expenditures, in stark contrast to other tech giants. A key task for Ternus is to push Apple to delve deeper into artificial intelligence" datetime: "2026-04-21T07:22:22.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/283454295.md) - [en](https://longbridge.com/en/news/283454295.md) - [zh-HK](https://longbridge.com/zh-HK/news/283454295.md) --- # "Hardware veteran" takes over as CEO, will Apple's AI answers be written by chip genes? After 15 years at the helm of Apple, Tim Cook announced that he will officially step down as CEO on September 1 of this year. What he leaves behind is a business empire with a market value approaching $4 trillion, boasting a massive cash reserve and an unassailable hardware ecosystem. However, with senior hardware executive John Ternus confirmed as his successor, investors and Wall Street analysts have shifted their focus from Cook's era of impressive financial data to a more challenging core question: In the current wave of generative artificial intelligence sweeping the globe, how will this tech giant, which heavily relies on terminal hardware profits, leverage its proud hardware DNA to solve a mathematical problem about the future of AI? With Cook's departure, Apple is facing numerous challenges. These include a supply chain that has become increasingly complex due to geopolitical tensions, as well as soaring storage chip prices driven by unprecedented demand for AI infrastructure. However, for Ternus, perhaps the most critical task in his new tenure will be to push the company deeper into the field of artificial intelligence—where Apple is currently lagging behind many of its large-cap peers. ## Apple's Current AI Strategy: Avoiding Significant Capital Expenditure A deep analysis of Apple's capital expenditure structure reveals that the management philosophy during Cook's era has leaned more towards rewarding shareholders through extreme supply chain management and high-margin service ecosystems (AppleCare, iCloud, App Store revenue sharing). This has taken a distinctly different path compared to its Silicon Valley peers. So far, Apple's strategy in the field of artificial intelligence has primarily manifested as avoiding massive capital expenditures; in contrast, giants like Microsoft (MSFT.US), Google (GOOGL.US), Amazon (AMZN.US), and Meta (META.US) collectively invest hundreds of billions of dollars annually in capital expenditures to build new data centers and equip them with expensive AI chips. In the critical area of developing foundational AI models, Apple has also chosen to delay in-house development, opting instead to rely on Google's Gemini model to provide cloud support for its AI features—including the highly anticipated major upgrade of Siri, which is expected to be officially launched later this year after delays. This "inaction" was previously seen as business wisdom to maintain profit margins, but as the AI race enters a phase where computational power is decisive, whether the "capital discipline" left by Cook will evolve into a "value trap" that constrains innovation has become the market's biggest concern. In 2024, Apple launched the "Apple Intelligence" AI system. This system integrates a series of features including image generation, text rewriting, push notification summaries, and deep integration with OpenAI's ChatGPT. Although consumer reactions to the system have been mixed, Apple's iPhone sales remain strong; users can still enjoy a rich and diverse AI application experience on these devices—albeit, most of these experiences stem from services provided by other tech companies ## Can the Hardware Faction Win the AI Counterattack? At 50 years old, John Ternus is not an expert in AI algorithms or software services; he is a pure hardware engineer and product manager. Apple emphasized in its official press release his leadership in the innovation of multiple product lines during his 25-year tenure—from the iterations of the iPad, the birth of AirPods, to the comprehensive migration of Apple Silicon chips in the Mac product line. Apple's recent strategy bets on the fact that heavy computational tasks will run directly on chips inside phones in the coming years. This trend will fully leverage Apple's advantages, as the company has been integrating AI-capable chips into its various devices since 2017. "By appointing a leading figure in hardware like Ternus, Apple may be signaling that it still believes the future of AI will rely on devices with tightly integrated hardware and software, rather than being limited to the software layer," said Timothy Hubbard, an assistant professor of management at the University of Notre Dame. Currently, Apple is gaining strong growth momentum from iPhone sales. In the recently concluded fiscal quarter, iPhone revenue grew by 23% year-on-year, reaching $85.3 billion; the company attributed this significant growth to the strong sales of the iPhone 17 series models released last September. Cook stated at the time that the demand for iPhones was "simply astonishing." The company is set to release its second fiscal quarter earnings report next week. When this report is released, Cook will still serve as CEO; however, investors will have many questions for Ternus to explore his vision for Apple's future direction. Hardware equipped with AI technology seems to represent the future direction of the market—this could be achieved through various forms of integration such as wearable devices, robotics, spatial computing, or through some new product forms that Apple has yet to showcase. In January of this year, media reports indicated that Apple is accelerating the development of three upcoming AI wearable devices, all centered around Siri's core technology, specifically including: smart glasses, a pendant-style device, and AirPods with built-in cameras. Additionally, Apple is expected to launch a foldable phone; Ben Bajarin, CEO of Creative Strategies, hailed this move as "the most milestone hardware moment in recent years." Despite the impressive sales data for the iPhone 17 series, investors need to be wary of the structural concerns behind the data. Market research firms indicate that this round of strong iPhone growth is more due to the release of pent-up upgrade demand rather than being directly driven by Apple Intelligence features. In fact, the most popular free AI applications in the iOS App Store are not Apple's own software, but rather ChatGPT and Claude. In the eyes of consumers, Apple devices are increasingly playing the role of a "high-end AI content browser." In addition, the restructuring of the supply chain triggered by geopolitical tensions and the soaring prices of storage chips are also eroding Apple's hardware gross margin. Although Apple does not directly purchase H100 chips for data centers, the squeeze effect of AI servers on storage capacity has already increased the procurement costs of memory and flash components in various Apple devices. Bajarin stated in an interview in March: "I think the biggest question right now is: what will be the next heavyweight product after the iPhone? The smartphone category to which the iPhone belongs has matured, and we cannot yet be sure what will take its place; but one thing is certain, it will present itself in some form of AI hardware." ## AI and Service Business The 50-year-old Ternus will also face another challenge: how to vigorously promote the application of AI technology in Apple's service business. In this business segment, Apple's revenue mainly relies on iPhone users subscribing to services like AppleCare, iCloud, Apple TV+, and using Apple Pay for payments. When consumers upgrade to paid versions of generative AI services or chatbots like ChatGPT and Claude, Apple can also earn a certain percentage of revenue sharing from it. However, Dipanjan Chatterjee, an analyst at Forrester, pointed out that in the coming years, "Apple will face a turbulent situation as the way consumers interact with technology is undergoing dramatic changes"—especially in the current rapid development of generative AI technology. Ternus must also make a choice: whether to continue adhering to the company's long-standing principle of "privacy first" or to embrace a "personalized customization" strategy driven by AI technology. For Cook, Apple's "privacy-first" approach to user data processing has long been a core differentiating advantage compared to other tech giants like Meta and Google—whereas the latter two often focus on helping brands precisely target and reach user groups through advertising. Gene Munster of Deepwater Asset Management stated in an interview on Monday that given Apple's prospects in the "personalized AI" field, his company has recently increased its holdings in Apple stock. Munster said: "For Apple, now is an opportunity to tell investors a very compelling story—that they have the ability to seize this opportunity." In the press release announcing the CEO transition on Monday, Apple did not mention AI at all. Instead, the release mainly focused on Ternus's 25 years of service at the company and his key role in "launching multiple new product lines (including iPad and AirPods) and iterating on numerous product series such as iPhone, Mac, and Apple Watch." However, it is evident that when the "Ternus Era" officially begins in more than four months, AI will undoubtedly become the core focus. In addition, Professor Hubbard from the University of Notre Dame pointed out that, at least in terms of innovation, Apple must return to its roots. Hubbard stated, "It is precisely those advantages that established Apple's dominant position—namely, the spirit of 'rapid innovation'—that constitute the starting point for Apple; and now, this may be where the company needs to return to its origins." ### Related Stocks - [AAPL.US](https://longbridge.com/en/quote/AAPL.US.md) - [AAPU.US](https://longbridge.com/en/quote/AAPU.US.md) - [SOXX.US](https://longbridge.com/en/quote/SOXX.US.md) - [SOXL.US](https://longbridge.com/en/quote/SOXL.US.md) - [AAPB.US](https://longbridge.com/en/quote/AAPB.US.md) - [AAPX.US](https://longbridge.com/en/quote/AAPX.US.md) - [SMH.US](https://longbridge.com/en/quote/SMH.US.md) - [AAPD.US](https://longbridge.com/en/quote/AAPD.US.md) - [AAPY.US](https://longbridge.com/en/quote/AAPY.US.md) - [APLY.US](https://longbridge.com/en/quote/APLY.US.md) ## Related News & Research - [Tim Cook built Apple's China era](https://longbridge.com/en/news/283459383.md) - [Apple Has Unusual Put Options Activity - Has AAPL Stock Peaked Ahead of Earnings?](https://longbridge.com/en/news/283386749.md) - [Next-generation Semiconductor Company Syenta Raises $26 Million in Series A Funding to Deliver Breakthrough Chip-to-Chip Connectivity for AI](https://longbridge.com/en/news/283512426.md) - [Meta extends custom chips deal with Broadcom to power AI ambitions](https://longbridge.com/en/news/282752154.md) - [INSTANT VIEW-Apple CEO Cook is lauded by investors as he prepares for new role](https://longbridge.com/en/news/283403849.md)