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John Turnas has been named CEO of Apple and Tim Cook named executive chair.
I'm going right to the press release from the company Apple announcing that Tim Cook will become executive chairman of Apple's Board of Directors and John Turnas, Senior VP of Hardware Engineering, will become Apple's next chief executive officer, effective
on September one, twenty twenty six, so that's later this year. Transition, which was approved unanimously by the Board of Directors, follows a thoughtful long term succession planning process Tim Cook continuing Tim in his role as CEO through the summer as he works closely with Turnus on a smooth transition. As executive chairman, Cook will assist with certain aspects of the company,
including engaging with policymakers around the world. We have talked certainly with our mark germat Good at that about the role that Tim Cook has played with this white house, but really with global leaders and guiding this company.
Yeah, huge news in the world of Apple, the world of technology the world of American companies and global companies. Apple has named Tim Cook executive chairman John Turnis as CEO. Turnus will join the board of directors, also effective on September first, Tim Cook will be executive chair. Tim Cook will remain CEO of Apple through September first through the summer. John Turnis will become CEO on September first. I want to bring in Bloomberg News Senior executive editor for Global Technology,
Tom Giles. Tom joins us from New York. Hey, Tom, just your reaction to I think what a lot of people are surprised by the timing.
Well, it wasn't clear that it was going to happen this quickly when we last wrote on this. As you mentioned in the Big Take, there was a sense Tim Cook has been rather coy about this. How quickly is it going to happen? We knew that Turnus was the air apparent, We just didn't know how quickly it was going to happen. But look, Tim Cook has turned sixty sixty five. He has had a great run in many respects at Apple. Yes, we've talked a lot about the fact that they are not as far along in the use.
Of AI as they would like to be, as they should be.
Frankly, given who they are that said, he is the person he took the baton from Steve Jobs. He was remains operationally supply chain wise, a genius in terms of making sure that Apple has the components that it needs at the exact moment that it needs them. He is the one who has been really the many years behind the scenes before coming to the to the forefront of really enabling Apple to be as successful as it has been.
If you don't have the supply chain down, it's really hard to create those those devices with the margins that they that they have and as timely a manner as they as they are. You know, it's been a rough few years for Apple in some respects with regard to you know, we've talked about their car efforts that went to know where, we talked about their TV efforts and AI. So there have been these moments over the last several years of like, well, where's that next killer product going
to come from? He has he has led them into lots of new and really interesting areas in terms of media, in terms of in terms of air pods, there is a lot of really interesting new stuff going on there, but not the.
Stuff that really grabs everybody's head, the headline.
But Tom all that to say, there's no indication that this was something that the board pushed for at this point. This was you know, on Tim Cook's own accord, at this point.
There's no indication. Yeah, there's no indication of anything along those lines. I mean, this is something that is being seen as orderly.
There's a little bit.
Of a tickdown stock last I checked in late trading. But I mean, anybody who's been following Apple, anybody who's been reading ARC would know this was coming. They would know that Turnus was the person who has the confidence of Tim Cook and the confidence of the board. You know, he spent half his life at Apple. He was he worked on computer monitors, product designed for the iPad, took over development of the Mac. He's since he's the head
of engineering, hardware engineering since twenty twenty one. Expansion in the product lineup, functional improvement on products, things like bat very live performance connectivity. Those sound really nerdy, but they're hugely important to consumers and users of Apple's products. And you've seen him start to take on a bigger and more public role at Apple in recent months. Definitely there were signs that this was in the offing.
Yeah, I mean, yeah, go ahead, no, no, no, please go Well, I.
Was just going to make the point that too. You know, Tim, Tim Cook is leaving.
At A at a an actually pretty good time. When you look at the stock price over multiple years, you know, it's it's down off the high reached in December, but it's it's it's hovering pretty close to that. So this is someone who has had the confidence of the investor community as a general rule over you know, of a very long tenure at Apple.
But to this point, you know, Turnus has really stepped up. As Mark reported in his story about the air apparent or possible air apparent, he named turnas you know he talked about when Apple held that event in New York earlier in March to announce the MacBook Neo. It was Turna's not Cook who did the big reveal, right, and he was on GMA Good Morning America. So he definitely has been taking a step forward here, Tom.
Yeah, exactly. And they've been expanding his portfolio as well. Last year got control of that secretive unit developing robots. It's that's actually slated for release as early as next year. He's taking a bigger role in product marketing, as we've talked about, even to the point of editing copy for the website as one of the anecdotes that Mark got
into his story. So his his profile has been rising, his portfolio has been broadening, and and now he's you know, he's going to be the guy starting in a few months.
Carol, I just want to say I'm doing a little bit of back of the envelope terminal math here going back to January of twenty eleven.
It looks like a pretty nice chart.
It is.
I mean, if you're yeah, if you're a shareholder of Apple, since then, you're pretty happy. Shares of Apple up more than twenty two hundred percent just since then, the S and P five hundred up four hundred and sixty five percent. So on an annual basis, the Apple since Tim Cooke took over Seer was announced as interim CEO was is up twenty four point four percent and annualized, okay, versus the S and P five hundred fourteen percent.
Well on that, and we're showing that right now for those who are watching on YouTube and Bloomberg originals.
Tom.
You know, the thing is in the press release, as Tim and I have gone through it, it did say that Tim Cook will become executive chairman of Apple's board of directors. He's going to assist with certain aspects of the company, including engaging with policy makers around the world, and I think about that share price and move up.
The Apple supply chain is renowned, and as you said, Tim Cook is the guy who knows this, but he's had to negotiate with some leaders, whether it's over in China where they have such a big footprint and then as they've been pivoting to India and elsewhere, but then also dealing with a very complicated and sometimes difficult White House and administration where you don't want to be on the wrong side of the president and his team. And Tim Cook has done this, I think many would say flawlessly,
really really well. So having him in that position is an important one.
You need somebody who can play a very diplomatic role on a global stage, and who better than Tim Cook, the guy who's been there for so long and has really been playing that role. As you said, you know, it's there's a delicate, delicate dance between Silicon Valley and the White House.
Tim Cook has you know, demonstrated.
That he has the ear of the president and knows how to speak in a language that appeals to Donald Trump. He gave him what was the.
Big golden iPhone?
Is that what it was?
Ihone?
You know, at a at a at a at at an event at the White House. I mean, you know, I think that every every big, every big tech ceo has had to learn how.
To It was a glass sculpture with a twenty four carrat goal base because I think the glass was the glass? Was it an iPhone that they maybe use in in their products Apple?
The point, the point being that you know, it's whether it's flattery, whatever it is that you know, you need to you need to know how to speak the language kiss, throing, whatever metaphor you want to use. As you said, he's also there's a very delicate balance that he's had to strike with regard to China and India. As we saw first during the pandemic and then as the the trade war really burst onto the scene in the last several years.
The we've learned the risks of overdependence on one particular area of the world.
For your supply chain.
So Tim Cook has had to navigate and you know, depend more on India war manufacturing more production there, and at the same time not go so swiftly, so quickly and recklessly that you alienate China, which remains a big important market. Now there's also a great deal of competition, and competition has been really rising in China for the iPhone over the last several years. And you've seen this whole bunch of new uh manufacturers there, Apo, Vivo, Huawei
all becoming increasingly important competitors there. But at the same time, iPhone is still popular and in many aspects and many parts of the country, and and so you you don't want to do something that's going to alienate the Chinese. At the same time, you have to diversify your supply chain. And that's something that Tim Cook has been doing and you know, it's it's it's it's a juggling act and he'll he'll be able to continue to do that in his new role as executive chairman.
I want to bring in man Deep Singh Thunk.
Yeah, I know it's feeling kind of mellow today as we waited for more on the war and then bam, he's.
Global tech research head at Bloomberg Intelligence. I think you know, none of us who've been following this or speaking to Mark Kerma and reading Mark's reporting is surprised by John turnas we know him. Thanks to Mark's reporting, I think what we're surprised about is the timing here. What's your reaction.
Look, I think it was inevitable that there would have been, you know, some sort of succession at Apple, and to my mind, appointing the hardware chief as the next CEO makes a ton of sense because this company is still reliant on hardware at the end of the day. That is what drives that one hundred billion in free cash flow that they generate. It's the hardware refreshes and you know,
they have missed out on the LM side. There are still questions that need to be answered in terms of what the new CEO strategy will be in terms of AI, CAPEX and llms. But if there was one person internally who would have thought it should have been their hardware chief, and so that's a good point.
I always think about like the right guy for the right time, and we've been talking a lot about Tim Cook and how he understood the global supply chain really in building that, and so that was maybe his tenure for john turnas. Is it, Mandy about protecting the hardware and the sales that they've got and then also trying to figure out how do you expand it? Is that part of what he has to do or is it about really just protecting the core here.
So look, when Johnny I've left Apple and he joined open Ai, there was a lot of speculation around what that new form factor will be on the hardware side when it comes to consuming llms on the edge. Right now, all the llms are or running on data centers because they need a lot of power. There will be a point when the lms can be distilled and run on device, and that's the time where Apple has to have that
perfect form factor. I mean, we know their vertical integration has served them well in terms of having their own chip making sure the specs are customized to running Apple's operating system. They need to do the same for LLM and that's where you know having somebody who runs the hardware division is the right guy to make that transition. My guess is they will probably be more acquisitive than they have been under Tim Cook.
For what what would they buy?
I mean, there are so many GENAI native companies with very you know, high valuations in the private market.
They may have.
Some of those are way too expensive to be bought by anyone.
Yeah, Look, I mean a company like company like Anthropic has seen its valuation double almost you know, every three months, so they are probably out of reach right now, but they perplexity, perplexity cursor. There are a lot of names that are still in that range where yes, you may have to end up spending fifty two hundred billion dollars, but there will be consolidation and.
That's a lot.
But look, that's where because they haven't really invested in their own AI efforts, they will have to acquire it.
So that idea of kind of is it Gemini that they were working on, or is Google's AI not Gemini Gemini. Yeah, that idea of kind of letting them figure it out and then rely on that.
I think it's a great idea.
Well I kind of I thought it was too, but that doesn't make sense. I mean, it holds them back.
When it comes to AI. I think a company of Apple size wants to have its own LM. That's what Amazon did Amazon, you know, invested in Anthropic, but then in parallel they were training their own LLM, and so Microsoft invested in open Ai. Now the relationship isn't going very well. Microsoft is investing in its own LLLM. So from that standpoint, I would be surprised if Apple strategies just to rely on Gemini, even though Google has been a great partner over the years for them.
We should go back to the stock reaction here, it's just down about four tenths of one percent right now. It doesn't seem like investors, at least in the after hours envolumes. Then we should wait for tomorrow. Of course, are two concerned with this?
Yeah, I mean I think this is probably the best transition you could have hoped for a company like Apple, you know, where the internal guy who was leading the
most important division in the company becomes the CEO. And look, I mean strategically there are still questions that you want answers for, but this is probably laying out a roadmap where they're saying, you know, he'll be CEO offecting September and uh, he'll have some months to plan out you know, what he wants to do differently versus what Tim Kok was doing, especially when it comes to the acquisition side.
I feel that's the one area where Apple has missed out and you want to see, you know, a more sense of urgency when it comes to acquisitions.
Well, and it does feel like Tim Cook, you know, not going anywhere. So it does feel actually to me very orderly.
Springs where he's got the vacation house.
But it feels very orderly like he's going to be around. It's not till September, right, He's going to help with the transition, and then he's going to still be there on those big global issues that can be super complicated as a big global company in terms of dealing with leaders right where your supply chain in is and as you move it around. He's going to still do that stuff. Or do you feel like that's just just in the press release or do you think that's real?
I think it's I have a heart. Tim Cook has been his career. No, I know, I know, and a lot of I mean Mark, Mark has talked to us about this that outside of Apple, like I mean he's known for somebody who works out and who works at Apple. Yeah, but that's what he works on, No, he right, he is very dedicated to this company. I would be I would be shocked, is my own personal opinion. I would be shocked to see him to go completely.
What's your take though on that.
Is that we are seeing some very you know, long tenured CEOs leave Adobe CEO he's stepping down. So look, these guys have been at the home for almost two decades and at this point they feel, you know, there is too big off a change that's going around them, and it's good to have a new leader. And I'm sure there will be things that get changed under the new leadership.
I think he was pressured.
Tim Cook, No, no, I would be very surprised if that was the case.
We should pull up the chart again from twenty eleven to twenty twenty six. Okay, okay, show show Apple's returns over that period of time. Where what look at that nineteen If anything, he was praised for April from August.
He was praised for his capital allocation strategy and you know Bsher Hatsway became Warren Buffett became a shareholder. So Apple's capital allocation has been top notch. But probably I would say in the last two three years is where there are question marks. Around why didn't they raise kapex for these AI data centers and all their Max seven piers were investing.
So I still think there's something to like kind of waiting for these guys to figure it out.
They didn't make the first music player, they didn't make the first tablet, they didn't make the first smartphone, but many people would say they've made the best of all those things. Maybe the same thing happens with AI.
I mean, they have a lock on distribution and it's still there, but this is like too risky of a strategy where you completely miss out on one of the biggest secular trends that probably I think we're going to witness over the next two three decades. And you're you're saying, I'm just gonna rely on distribution.
M h m hmmmmmm hm