The world is preparing to meet Apple's new CEO. At the company's annual event on September 9th, Tim Cook will not be unveiling the latest products for the first time in over a decade. Instead, John Ternus will debut as the new Chief Executive Officer during the company's most important event of the year.
Expectations are high as Ternus takes the helm when Apple faces the need to develop its products for the age of artificial intelligence. In July, the iPhone maker became the second company in history to reach a market capitalization of $5 trillion, raising the bar for analysts' and investors' expectations regarding financial performance and product refinement.
Due to his hardware experience, many believe that his tenure at the helm could signal a new era of innovation for Apple. This week, everyone will be watching Ternus's vision signals, especially since the company is expected to follow competitors into the new product category—the foldable iPhone.
Ternus will need to quickly define a course for Apple that goes beyond the hype of the current event. The company faces a number of pressing issues, including regulatory obstacles in Europe and memory shortages. His engineering background could be a significant advantage for Apple, which has been criticized for its approach over the past two years. Last year, the company delayed the release of a new version of Siri, which is now planned for launch this autumn.
Gene Munster, managing partner at investment firm Deepwater Asset Management, noted: 'It was a huge miss. Fortunately, they are on the right track, but it could have been a much bigger win for them.'
Apple often adapts its devices and chips to its own services and software, and Ternus's deep hardware expertise could play a crucial role in developing new devices optimized for AI. In the short term, Apple is counting on Siri to advance in the AI race. The updated AI assistant will use data such as user text messages and photos to provide personalized answers to questions. For example, a user could ask Siri to find an upcoming doctor's appointment or dinner reservation by referencing their text messages.
Apple states that the new Siri will be able to perform tasks within specific applications and answer questions about what is displayed on the screen, which could help it catch up with Google Gemini. Nabila Popal, senior director at research firm International Data Corporation, told CNN that two factors could give Apple an edge: its traditional focus on user privacy, as well as the way it integrates AI directly into iOS tools like the Camera and Messages apps. Popal stated: 'Consumers simply want a device that makes their lives easier and elevates them to a new level, and I think that's what Apple will do.'
Most attention will be focused on Ternus presenting a new blockbuster. Cook is known for scaling the iPhone into a multi-hundred-billion dollar annual business. Through the launch of a network of services and accessories such as Apple Music, Apple Card, Apple Watch, and AirPods, Cook made the iPhone an integral part of daily life.
Nevertheless, investors and analysts hope that Ternus will provide a new impetus in new product development, such as the foldable iPhone. IDC predicts that Apple will capture 40% of the foldable phone market by 2027, despite lagging behind competitors Samsung and Chinese smartphone giant Huawei. In a recent IDC report, Popal wrote: 'Apple's entry into the foldable device market not only restarted growth in a category that was losing momentum but fundamentally changed the market trajectory.'
The tech industry was shaken by the ongoing memory shortage—a critical hardware component needed for devices to quickly retrieve stored information. Data centers led to a sharp increase in demand for these components, making them significantly more expensive. This forced tech companies like Apple, Nintendo, and Microsoft to raise prices on their products. In July, Apple increased prices for the iPad, Mac, and other devices while keeping iPhone prices unchanged.
During the last earnings report in July, Cook stated as CEO: 'We are in what I would characterize as a century-long flood of memory prices, with exponential growth in memory costs.'
Some analysts believe that consumers should prepare for price increases on iPhones. Mike Howard, Vice President of Memory Coverage at research firm TechInsights, estimates that Apple will likely have to raise smartphone prices by about $250–$300 to maintain margins. He told CNN in July: 'We should start thinking about a $1500 iPhone instead of a $1000 or $1200 iPhone.'
Apple likely faces even more obstacles under the strengthening regulation of Big Tech in the European Union. The company recently announced changes to its App Store operating terms to comply with EU rules. Furthermore, due to European Commission regulations, the new version of Siri will not be launched on iPhones and iPads in the European Union. Europe is the second-largest market for Apple after the United States.
The EC requires Apple and Google to give third-party AI assistants greater access to iOS and Android systems. However, Apple and Google have argued that such access would raise privacy concerns. Experts agree that consumers should be cautious when granting AI agents broad access to content stored on their phones and computers. Michael Stokes, Senior Vice President of New Technologies at Veilant, previously told CNN: 'An AI agent can exercise delegated authority of the user to perform other actions that the user might not want to happen.'
However, an EC representative told CNN that the EC allows companies like Apple to 'implement appropriate measures for privacy, security, and integrity protection.' Ultimately, Ternus will have to overcome these difficulties while justifying the high valuation achieved during the Cook era. Bank of America analyst Vamsi Mohan wrote in an August research note: 'Apple is already so large, profitable, and deeply integrated into the lives of its customers that incremental improvements may no longer be enough to redefine the company. Ternus's task will be to maintain the profitable machine built by Cook while restoring a stronger sense of technological wonder.'
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