When ex Apple CEO Steve Jobs passed the reins to Tim Cook in 2011he left her a simple piece of advice:Never ask what I would do. Just do the right thing. Fifteen years later, that advice seems to have paid off. Under Cook, Apple’s market cap has grown more than 1,000 percent, while annual revenue has nearly quadrupled to $416 billion last year.
Now, as Cook prepares to step down, he is passing on his instructions John Ternusthe longtime Apple executive who will take over as CEO in September. Ternus, who joined Apple in 2011 and currently serves as its senior vice president of hardware engineering, will inherit a company at the height of its financial success — along with a host of new challenges, including defining Apple’s long-term AI strategy.
“For John, I think my advice — or what I’ve told him — is that one of the most important decisions he’s going to make is where to spend his time, and I would spend it where it’s the most beneficial for the company and the users,” Cook said during Apple’s second-quarter earnings call today (April 30). The next CEO should also remember that products that enrich lives remain Apple’s “north star,” Cook added.
Cook’s remarks came after Apple beat Wall Street expectations for both revenue and earnings. Quarterly sales rose 17 percent year-over-year to $111.2 billion, while net income rose 19 percent to $29.5 billion. The iPhone led the way, generating $56.9 billion in revenue, a 21 percent increase driven by the launch of the iPhone 17e in March. Cook called the iPhone 17 lineup “the most popular lineup in our history.”
Other segments also posted gains. Mac revenue rose 6 percent to $8.3 billion, supported in part by the introduction of the affordable MacBook Neo. iPad sales rose 8 percent, while wearables, including the Apple Watch, rose 5 percent. Meanwhile, Apple’s services division, which includes Apple News and Apple TV, hit a record $31 billion in revenue.
According to Cook, Apple’s strong performance makes this an ideal time for a leadership transition. “This time for the transition is right for a number of reasons: First, our business has been doing extremely well,” he said, pointing to the company’s current strength and its future roadmap. He also described Ternus as “the right leader, ready to step into the role”.
Ternus, for his part, praised Cook’s leadership style, emphasizing his thoughtfulness, purposefulness and financial discipline. He said he plans to take those qualities forward when he takes on the role in September.
However, Ternus will face significant challenges from day one. Chief among them is Apple’s position in the AI arms race. The company is under pressure to prove it can compete against big tech companies like Google and Microsoft. Its current approach of extracting “Apple Intelligence” and relying partly on third-party AI models has yet to fully gain traction.
Asked about monetizing AI, Cook pointed to Apple’s increased investment in research and development as a signal of its ambitions. R&D spending rose to $11.4 billion this quarter, from $8.5 billion a year ago. “We’re investing in products and services, and we see opportunities in both,” Cook said. “We couldn’t be more excited about how the future is playing out.”
