(Bloomberg Businessweek) -- Tim Cook has transformed Apple Inc. since taking over as chief executive officer from Steve Jobs in 2011, introducing new product categories (the smartwatch), pushing into new businesses (streaming video), and making an audacious attempt to take a new type of computing (mixed reality) mainstream. He's served for far longer than the average Fortune 500 CEO, and, at 63, is older than many of his peers. But if it seems like a logical time for Cook to start planning for someone else to shape Apple's next chapter, the situation is complicated by the lack of someone who's both ready immediately and likely to be a long-term successor.
Cook hasn't made many changes to Apple's executive team, which is mostly comprised of close colleagues he's worked with since the Jobs era. Other than the high-profile exit of designer Jony Ive and the arrival and departure of retail head Angela Ahrendts, the team has stayed mostly intact for the past decade. Like Cook, the key people in his inner circle are old enough and rich enough that they could have retired years ago.
Apple has a lot to grapple with. It is under regulatory scrutiny in the US and European Union, and it's trying to prevent the breakup of its App Store, which generates $20 billion a year in sales. Smartphone sales are dipping, and Apple is struggling to sell devices in China while also trying to gradually pull production out of the country without angering Beijing. Then there's the ever-present need to hit on the next major product. After the release of the Vision Pro and the abandonment of electric vehicles, that will likely be the defining challenge for his successor.
During a lengthy interview on singer Dua Lipa's podcast in November, Cook made his most in-depth comments to date about succession. “I can step off the wrong curb tomorrow,” he said. “My job is to prepare several people for the ability to succeed, and I really want the person to come from within Apple. So that's my role, to make sure that there's several for the board to pick from.” He gave no hints about who these people were but called the company's plans “very detailed.”
Toni Sacconaghi, an analyst at Sanford C Bernstein who's covered Apple for two decades, says succession has become a topic among investors. “You look down the list of executives, and it's really not clear how this all pans out,” he says. “You wonder why there hasn't been more transparency and exposure for the next leaders. It raises a broader question: Does Apple have a comprehensive and deliberate set of succession plans?”
Several people familiar with Apple's inner workings recently discussed the issue with , requesting anonymity to speak about the sensitive subject. If Cook were to step down soon, these people say, he would almost assuredly be replaced by Chief Operating Officer Jeff Williams, who emerged as the top candidate to be Cook's successor a few years ago. In 2015, Cook named Williams Apple's first COO since Cook himself held that role under Jobs. That same year, Williams shepherded the first major new product in the Cook era, the Apple Watch, to market. And, four years later, he replaced Ive as the head of hardware and software design.
But Williams, who's 61 this year, is only two years Cook's junior, and company insiders say they think it's now unlikely he'll be the new long-term chief. Apple's board would probably want an executive who, like Cook and Jobs, would stick around for at least a decade. “If you asked me five years ago, it was very clear Jeff was leading the pack to become CEO,” says one longtime Apple executive. “But the slowness to refresh the C-suite leaves a problem with who you can bring on board.”
There's no reason to assume that a change at the helm is imminent. Cook may be older than the CEOs of the other tech companies at the top of the S&P 500, but he's hardly the oldest person running a major corporation. “If Trump or Biden can be president at 80, Tim Cook can be CEO of Apple for many more years. It used to be automatic that CEOs are moved out at 65,” says someone who knows him. “The world has changed.”
While Cook hasn't given any indication how long he'll remain in charge—other than telling Dua Lipa it would be “a while”—people close to him believe he'll be CEO at least another three years. After that, they say, he'll start a charitable foundation to donate the wealth he accumulated at Apple.
If Cook were to stay that long, people within Apple say, the most likely successor would be John Ternus, the hardware engineering chief. In a company whose success has always come from building category-defining gadgets, the ascension of a hardware engineering expert to the CEO job would seem logical. Ternus, who's not yet 50, would also be more likely than other members of the executive team to stick around for a long time, potentially providing another decade or more of Cook-esque stability.
Ternus is well-liked inside Apple, and he's earned the respect of Cook, Williams and other leaders. “Tim likes him a lot, because he can give a good presentation, he's very mild-mannered, never puts anything into an email that is controversial and is a very reticent decision-maker,” says one person close to Apple's executive team. “He has a lot of managerial characteristics like Tim.” Christopher Stringer, a former top Apple hardware designer, called Ternus a “trustworthy hand” who's “never failed with any role he's been elevated to.” Eddy Cue, the Apple executive known as Cook's closest confidant, has privately told colleagues that Ternus should be the next CEO, according to a person with knowledge of the matter.
Apple has increasingly made Ternus the face of new products. He was at the forefront of the May 7 iPad announcement, leading the introduction of the new iPad Pro and iPad Air. Last year, he toured Europe to discuss the company's environment initiatives, a key area for Cook. But perhaps the biggest sign of Ternus' increasing prominence was a 30-minute TV interview, primarily about chips, in December. “That was huge,” says a former longtime Apple executive. “They had him on morning TV talking about something that's not even his bailiwick, and he came across as presidential.”
Ternus joined Apple in 2001, working originally on external Mac monitors. He was too junior during Jobs' prime to have had much direct interaction with the co-founder. Over two decades he gradually took on responsibility for the entire iPad line and then subsequently the Mac, AirPods and, in 2020, the iPhone. A year later, he was named to the top hardware post. More recently, the Apple Watch hardware engineering team started reporting to Ternus instead of Williams.
Ternus is known as a collaborator who helped the hardware and software teams work closer together, enabling new technologies such as OLED screens in iPads. He's said to get intimately involved in product development, bypassing middle managers to work on problems directly with individual engineers. Colleagues praise him for being a unifier in a company that isn't lacking in big egos. “I thought he was very good at what he did and a decent guy,” says a former hardware engineering vice president who worked directly with Ternus. “Not something I can say about every executive there, many of which like to more or less imitate Steve Jobs.”
Ternus isn't without detractors. Some at Apple say he's a political operator who isn't respected by some of the company's top engineers, who say he doesn't focus on future bets, make bold technology acquisitions or differentiate himself as an innovator. Skeptics also point out that Ternus hasn't been central to many of Apple's biggest product moves in recent years. He was involved only in later generations of the Apple Watch, for instance, and hasn't done enough to help the company develop a successful smart-home strategy. Other executives, not Ternus, conceived of Apple's recent foray into personal robotics, though he now runs it alongside Apple's head of artificial intelligence. While Ternus helped lead the integration of Apple's own chips into Macs, company executives say the switch away from Intel Corp. could have happened years earlier.
Perhaps most significantly, Ternus had limited involvement in two of Apple's most ambitious recent projects: the Vision Pro headset and the self-driving car. Of course, the car project was a failure, and the headset hasn't yet proved it will propel Apple into the future, so it's not clear whether Ternus' distance from those projects will hurt or benefit his reputation over time. He's also had some misses, including on his first marquee feature after taking over the Mac: the Touch Bar, a touchscreen display above the MacBook Pro keyboard that confused customers and was discontinued after five years.
“They got a real big problem,” a person close to Apple says. “Ternus is a great guy, but he's honestly really junior. He comes off as just one of the guys in the room, not like a refined executive or a person in charge. Being the CEO of a multitrillion-dollar company, you better command presence in the room.” Another person says the internal criticism of Ternus is that he needs to assert himself with more force, adding that he seems to know this is where he'll need to improve. The fundamental question, says one person close to the matter, is whether he'll be ready to take on the role when Cook steps down.
Other names that come up include Craig Federighi, head of software engineering, a recognizable face among Apple's biggest fans who's known internally to be conversant on corporate issues well outside of his purview, and Deirdre O'Brien, its head of retail and a Cook confidant, according to one former executive. People close to the company consider them unlikely successors.
In addition to a CEO transition, Apple is facing what could be a broad management shake-up in the next few years. Veterans such as former hardware chief Dan Riccio and ex-marketing head Phil Schiller are at the end of their tenures, while other high-profile Apple executives have been quietly preparing for eventual retirements, according to people close to the company. “Some year, I don't know when, all these people have to go,” says a longtime executive. “There's going to be a big vacuum.”
Each spring, Apple holds what it calls the Top 100—a private executive offsite typically held in California's Carmel Valley that brings together the most important people at the company. This March, Ternus was a prominent presence, helming the presentation of the company's technology roadmap. He'd led this talk before, but more in the capacity of an emcee while a range of lieutenants went over individual areas. This year, he conducted the presentation himself. One person with knowledge of the event says the implication was clear: “He's being groomed.”
While Apple's next CEO was likely in that room, some more skeptical insiders say the best approach for the company to retain its edge would be to consider an outsider. “The only way they avoid becoming an IBM-like company is if someone comes in with a truly revolutionary new idea—and it's unclear who that person is,” says one person at Apple.
But that scenario is probably off the table. The company has often struggled to integrate outside executive-level talent, says another longtime Apple leader. “It's going to be an insider,” this person says, “because it's such a cult.”
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