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Welcome to a special edition of Bloomberg Tech. Tim Cook is stepping down as CEO of Apple on September first, after fifteen years leading the company. He will become executive chairman.
Taking over as CEO John Turnus.
He's been Apple's head of hardware engineering since twenty twenty one, is for twenty five years at the company focused on product development.
Over the next hour, a breakdown Cook's legacy, Apple's performance, and what will change under new leadership, all things that investors are trying to price in. We'll also look at Cook's next role working with policymakers and get reaction from markets and lists and our team of reporters.
And joining us first as Bloomberg Senior tech headder Daniel Olman in New York, who helps lead out consumer tech coverage, which of course reported earlier this year that Turnus was the heir apparent.
Mark German has an.
Extraordinary way of for seeing Apple's future as always, but who is John turnas so.
He really has spent most of his professional career at Apple. He joined just four years after graduating college, so he really has grown up there professionally. He came there as a recent mechanical engineering grad and as you said, really has that background on the product side. So he really is a hardware guy, and as we've reported here at Bloomberg more recently, has been consolidating power and responsibility on the hardware side, presumably in preparation for this CEO transition.
Overnight, Bloomberg published the full memos that Tim Cook and John Turner shared with Apple's staff. And I'm just pointing that out to our audience because right now there's basically a company wide all hands going on, so we're on the watch for any news that comes out of that. What else are we learning. The read on this from our reporting and the comments from Tim Kirk is that he has a new role, but he's not really going anywhere. What are we expecting him to do?
So he's going to be transitioning to an executive chairman role and really focusing on diplomacy, both at a corporate level at almost geopolitical level, just given where Apple sits at the intersection of US policy and US relations with countries like China. So, according to our reporting, at least as much as John Turnis was ready to assume the role of CEO, wasn't quite ready to take on this more geopolitical role of negotiating on behalf of the company in a really high stakes way.
That is the core of the story and what you need to know about Apple Bloomberg's day in a woman who leads consumer tech. Thank you. Let's get more on Wall Streets take on the industry's take with Ben veteran creative strategy CEO and principal analysts. He his coverage includes consumer technology, personal computing devices, semiconductors, and with respect, Ben, you've been at this for a very long time, pretty much the same amount of time that John Turnus has
been at Apple. He is a hardware guy, He's an engineering guy. How do you see this changing Apple going forward?
Yeah, I think there's a lot of excitement just coming from a now hardware maybe more engineering centric CEO. It's obviously been a while right since that has happened for someone who I think both the company and then the outsiders believe would have a more distinct point of view on the hardware side.
Of things.
I think there's also just a cultural dynamic, right working for an engineer, having a CEO who can speak your language, who can be in that room on product development, maybe work through some of the real hard engineering challenges for Apple's roadmap. And then more importantly, I think, you know, the next phase of Apple's growth is still going to be very hardware centric, with existing categories getting more aggressive as they launched more products for family as well as
a whole slew of new hardware category. So I think there's a lot of optimism there. You know, we've heard he's well liked. I know, you know, Mark German and you guys have said the same thing. So I think there's there's a lot of positivity and I think the street will respond well. I think the market will like him.
And then obviously, with Tim Cook not going away, there's the you know, the calming presence there that maybe Tim Cook can still do some of the geopolitical stuff that needs to happen and let John you know, just continue to focus on execution at Apple.
Then how surprised were you either by the timing or that it happened as tool.
No, not surprised by Mark German and I've been talking about this for probably two years.
You know.
I think the reality is that we had felt that Tim Cook would want to get past the fiftieth anniversary, which is what he did lead You know, you now have a couple more quarters where Tim could will still be on earnings calls to help ease that transition, and I would expect John Turnas to be involved as well.
You know, we had.
Felt that it would be this year, but really because I feel like the market just wanted to know, like the industry to as well, just wanted to know who's going to lead Apple for the next ten to fifteen years. And I think that there was angst around that, and it's good that they did this post fiftieth and now we now know who will be at the helm and I think, you know, again, it's a good decision.
All of this.
Does it signal confidence that the AI strategy is coming, that the right building blocks are in place for WWDC for September the first to be often to the races for John Turners.
I think so.
And I think that's a great point just in terms of right, if it wasn't right, if there was any hiccups, or could we be worried about a delay. Is there lack of confidence in what they're doing? Right, this would not be the right time. So I do think that there's a lot of things are in place. Timko is
happy with the direction that the company is in. I think he's happy again with the stewardship of the culture of Apple that he was then tasked with after Steve Jobs died, and now John Turners will be responsible for carrying that culture forward as well. So I think right there was a lot of intention.
Right.
I don't expect Tim Cook would have done.
Any of this in haste or by any sort of pressure.
I think he just felt it was the right time.
Apple's in good hands and in a good position in terms of all of their strategies, and now it's again it's a time for you know, John to drive the next leg of growth for Apple.
An engineering brain is how Tim Cook described John Turners, but with an innovator's heart. So talk about the innovation you started to see and we understand how much adoption of AI that John has brought to his own team internally. But he's also working on the hardware as well to bring us the future of AI within Apple.
Yeah, I think the innovation side, even the invention side, where you know you've got somebody who can be in again that room, who can be a fast adopter, who can push the limits of technology, and who can have high expectations and high demands of the engineers, which is really one of the things that you know, when Steve Jobs was there, he's constantly challenging people making them be better, and he came at it from like.
A what was possible, right, what was possible with product and with technology. So I think you know, John Turnis is going to have that.
He's obviously, as you pointed out right, been at Apple a really long time and you know, more importantly been involved in some of the biggest product launches that Apple has had, So I think he's well suited for this. There's obviously a lot of very key decisions that he'll have to make, and I think people will want to see how he handles that, you know, things relative to
their AI software strategy. As good as there are strategy is just knowing where they're going to land in software partners that they'll make there, so it'll be you know, interesting to see and evaluate that. But like I said, I think coming from the engineering side. When Apple's going to need to be in a hardware growth cycle for the foreseeable future is a good spot and I think he'll bring a lot of expertise to that, to those conversations.
And Maharon have creative strategies, great analysis analysis that maybe the market still wants to wrap its head around. Let's look at the market reaction because Apple is lower today. In fact, it's the biggest points drag on the NASDAT one hundred. We're of by two and a half percent. Now we're seeing what therefore ninety eight billion dollars wiped off the market capitalization of this company. Still it's worth three point nine trullion ed, but there is some questioning.
Yeah, it took time to get to this decline for the market to make itself up when the major indices are flat, basically a lot amidst many headlines coming up.
Tim Cook maybe stepping down a CEO, but his skills in corporate diplomacy will still be a hand for Apple. More on that next. This is Bloomberg Tech. Welcome back to a special edition of Bloomberg Tech. We check in on Apple because it is the biggest points drag today. We're seeing its worst performance well in a couple of months February, the twenty seventh new leadership a CEO transition Tim Cook to John Turnas.
Tim Cook added.
Two thousand percent or thereabouts to the stock market valuation of this company over his fifteen year tenure ed.
One of Tim Cook's challenges has been managing Apple's relationship with the White House. The outgoing Apple CEO has navigated global tariffs and supplying chain disruptions, while on the whole staying in President Trump's good graces over the course of two administrations. That was evident in today's post from the President describing Cook's quote amazing career and calling him, quote
an incredible guy. Let's get more on the Cook Trump dynamic with Bloomberg senior tech editor out of Washington, Mike Shephard, This was a focus for Cook and it will continue to be, shep What do we need to know?
So it certainly will be. And you know when we talk about the Apple statement pointing to his new job engaging with global policy makers. Naturally, that means continuing work with officials in China to ensure that their presence there is unfettered and that they can continue to produce there, and that their expansion into India to bolster the supply chain there for the company is proceeding a pace as well. But there is no other relationship more important right now
than the one with President Donald Trump. And Cook was really a pioneer among the tech industry when it came to engaging with the President. He really built that tie all the way back in twenty seventeen, shortly after Trump took office in his first term, and the two began exchanging phone calls and really having this kind of dialogue that the President alluded to in his truth Social post, and he even talked about how Cook would go to the White House and to him specifically as president, seeking
certain things, seeking relief from impositions by the government. And we know that he was able to persuade the first Trump administration to layoff on some terifts that would have hit iPhones and AirPods and other Apple devices. And more recently since the President returned to office, we have seen that same level of engagement and really the same payoff for Apple in terms of relief from some of the
President's tariffs. In this role will take on continued importance, of course, with lingering tensions between the US and China over trade, and of course now with the geopolitical friction rising touched off by the war in Iran, and so we're going to have to see how Tim Cook places this out. How much he is continuing to be a frequent interlocutor with Trump and a frequent visitor here to Washington too.
Mags, Mike Shepherd is always wrapping things up in Washington.
Thank you.
Let's get more on the political global dynamics. Tim Cook has navigated and will continue to Jason Oxman's with our CEO of the Information Technology Industry Council. It's a tech trade association, a global one, which Apple is of course a member. So Jason, how important will Tim Cook's senior role executive chair remain for the company?
Well.
Tim's role and his leadership in the tech industry has been incredible, but as Mike noted, his work on the geopolitical government diplomacy front has been even more impactful.
I think Tim.
Cook really set the stage for the tech industry's engagement with the Trump administration. He developed, as we've been talking about, a personal relationship with the President, but he also helped inform the president's decision making in a variety of ways, and I think the US China relationship is really of the center of that. So I'm pleased and the tech industry has certainly pleased that Tim Cook will continue to
play this role going forward. I think it's important for the administration to understand the business impact of the political and governmental decisions that are made, and that US China relationship is at the core of that.
I also think Apple has.
Been a leader in investing in the United States in manufacturing, hundreds of billions of dollars of investment made there. But also reminding the administration that supply chains are global. So as Apple and the rest of the tech industry continue to invest in manufacturing in the United States, they need access to critical components and need access, of course to the ninety five percent of the world's population that doesn't live in the United States as customers for American technology.
So I think that role has been important will continue to be important going forward.
It's worth remembering Tim Cook's supply chain prowess. We have seen supply chain changes from China into India non for Apple, what's number one? Therefore, for Tim Cook to address September the first and continue to do so.
As the role of CEO. Is it more Iran or is it more China.
Well, I think China is at the center for the technology industry of the discussion, because although the relationship between US and China is complicated, to say the least, they are the two largest players in the global supply chain. But we're of course very much looking forward to President Trump's visit to China. I think the discussions there will be productive. And Apple has definitely demonstrated, as other technology
companies have, that manufacturing is global. So as manufacturing happens in the US, it happens in China, it happens in India. The rest of Southeast Asia of course is a manufacturing hub as well.
So I think that.
Geopolitical relationship is enormously important, and early milestones and signs of the warming relationship between the US and China are obviously very positive. Continuing that relationship going forward will be crucial for the tech industry. Look when you look at supply chains and critical minerals, a lot of things that just aren't available in the United States are available in China, and we need those supply chains globally to remain active.
Let's end the discussion by remembering what happens. The President put pressure on Apple last summer. He wanted them to build the iPhone in the United States, and he talked about tariffs. In August, Apple announced over four years a six hundred billion dollar commitment to manufacture more things in the United States. Was that fully resolved that request from the White House and how Apple responded to it.
I think Apple's response was enormously positive. We saw the President and senior members of the administration visiting Apple manufacturing facilities. We saw a very positive reaction of the White House about the moving to the United States of a lot of manufacturing capability. Look, can all manufacturing happen in the
United States, No, of course not. We need to continue to advance manufacturing in the United States in parallel with manufacturing happening around the world, in the same way that no American company can succeed only investing in the United States market for customers. Because only five percent of the global population lives in the United States. You need access to the rest of the world.
So I think it is a balance.
I think Apple has done a phenomenal job of investing significantly in the United States in order to be responsive to the administration's goals, and I think the rest of the tech ecosystem is doing the same. The second day of the Trump administration, the very first announcement was about data center investments in the United States, and that's happening apace.
But at the same time, I think we need to recognize that the rest of the world economy and the rest of the world's supply chains are global, and we need to focus on that as well.
Jason Oxman, CEO of the Information Tech Industry Council Thank You Apple navigates a leadership transition. Amazon is doubling down on AI. Amazon, already one of Anthropic's biggest backers, is investing in additional five billion dollars in the company, securing a one hundred billion dollar cloud commitment in return. The news broke within minutes of the Tim Cook announcement. Bloombos Matt Day has more. Last night was chaos. This was a big deal in move markets. What do we need to.
Know, so we need to know is that there really aren't any questions anymore about how much scale Amazon is going to have in the AI business. You roll the clock back a couple of years and they were a little bit at c in this new market.
You know.
Now they've got one hundred billion dollar plus commitments from Anthropic as well as Open Ai, so it seems they've really kind of found a seat at the table here empowering these AI models.
How much are we still seeing this circularity? Is the market likes to call it the equity being given to Amazon, but the promise towards AWS is that just inevitable the way these deals go.
It sure seems to be so last night's commitment. The details are five billion from Amazon to Entthropic now up to twenty billion dollars sometime in the future depending on certain commercial arrangements. Then on the other side of that, Anthropic is going to spend somewhere north of one hundred billion on Amazon services over over ten years. So a lot of money gone back and forth, and that.
Deale struck at that valuation of three hundred and fifty billion dollars.
We appreciate you.
Bloomberg's Matt Day on all things Anthropic and Amazon. Welcome back to a special edition of Bloomberg Tech. We check in on the markets and then as that one hundred doing very little of anything today, we're currently trading flat by about tenth of a percent lower. Of course, geopolitical headwind still buttress the entire market. We have the wash hearing, and we of course have still questions over negotiations between
us in Iran. But the key story in technology is one we can continue to be fixated upon.
Apple is your biggest points.
Drag on the Nasdaq one hundred to day, having the worst day in a couple of months, and end of February of by two point six percent. This as we hear of a changing of the guard after fifteen years, Tim Cook is handing over the rains come September.
The first ed yeah to John turnus a hardware guy, an engineering guy. Apple may be going for continuity in its choice of new CEO, but Tim Cook's left a lasting legacy and impression on the company that he ran for fifteen years. Bloomberg's senior executive editor for Tech, Tom Giles, is with us, and that's what we've been reflecting on. Tom. You know, you can measure it in a number of ways. One, when Tim Cook became CEO, Apple had a market cap
for three hundred and fifty billion dollars. It's breached the four trillion dollar market cap mark, how else would we measure the era that was Tim Cook's CEO of Apple.
So many ways he oversaw such a massive expansion in terms of their footprint, in terms of where they operate and how deeply they penetrate markets like China, for example, based on a foundation that he really laid in terms of bringing Apple into China and expanding it there in terms of the number of stores, the number of products, and it's just its reach at a time when other US companies, most other US big tech companies saved Tesla, could not make any headway in that country. Massive legacy
other numbers. To think about eight x increase in profits over his ten uere a massive increase in the number of stores to five hundred and forty three point sixty six trillion dollars in market cap, as you alluded to earlier. And that's just a testament to the ways that he really made Apple so much more interwoven into our everyday lives.
Jam packing the iPhone with more features and then adding peripheral devices like the watch and like the AirPods, not to mention expansions and things like the Mac and the iPad. It was just a matter of really expanding Apple's reach geographically and deeper and deeper into the lives of concer uomers around the world.
Tom like more than two and a half billion active devices, but not many of them are the VR headsets, and certainly none of them ended up being a car.
There have been a couple of missteps along the way.
Absolutely there were things that Apple spent a lot of time and money on. The car you mentioned ten billion dollars over ten years. They gave it a college try and never quite came together. The vision pro, as you pointed out, has not taken off, and that's one that it will not go down in the annals of his great success stories. But so many other things did take off, like the watch, like the AirPods. My own personal view on the AirPods. I remember the early versions. They look
like earrings. They weren't my cup of tea, but now I am completely hooked on them. Left the cords completely behind. That's just one small personal example of the ways that you know, the expansion and the ways that Tim Cook entered use products that one over even the skeptics like.
Me, But have your kids the gen z has left the cords behind. That's the question, Tom jarles, we so appreciate it. We're glad you took one of the AirPods out to join us today. Now, in choosing Turners as cook successor, the I film maker is stressing that its future remains in that hardware, like the AirPods. But according to Bloomberg opinion columnist Daily, that meansing incoming ZEO is inheriting a big gamble. Dave please to say, sits next to us here? Why is it the gamble in this age of AI?
Well, look, when you put Apple alongside the other big tech rivals, Google, Amazon, Meta, they're spending on the AI revolution in Apple's case is very very small, magnitude smaller. And you know, depending on how you look at it, either Tim Cook's been pretty restrained, They're quite shrewd and saying you know what, maybe we don't have to invest so much in that giest yet, or Affle's hopelessly behind.
And when all these data centers start coming online, Apple's going to be more vulnerable for it, particularly if some of these AI applications get put in the phones that aren't the iPhone and other devices that aren't Apple. I see it personally, you know, the hiring the promotion of John Turners. It's Apple saying, look, the thing we do best is hardware. And you know, I think if you deviced analysts two years ago, whether or not Apple hadn't much AI by now, they had said that had been
a disaster. But look, the iPhones never been stronger. When people use the latest AI tools like Vibe coding, they use a MacBook to do it. Mac Mini's were running on shortages because people were using that for identic AI. Apple is still the device of choice, and I think that's what Apple is saying here. They're saying we need to carry on being that company whilst working in some of these new technologies as well.
Well.
The other kind of peripheral piece of your column that's so interesting is you capture the kind of role that that he's played in development, and so you talk about ambient computing, I'm talking to John that is, you know, he's kind of like gone through the development cycle of products that the new way people interact with software, not necessarily the iPhone. But then you talk about chronology. June, we have WWDC. Tim Cook will still be there September
and into the fall. That's iPhone season, and you are basically billing this as his on stage moment all around the iPhone explain the thesis I suppose.
I mean, look, one of the questions about Tim Cook moving on was going to be the timing, right, if you see Apple as vulnerable in some ways, the timing could have been difficult. By announcing this now and saying that John Turners will take over in September, his first
real public introduction to the wider world. I mean, he's well known in technologies because but to the wider world, it's going to be standing on stage saying, here's the new cycle of iPhones, and around that time we're expecting, if you know Bloomberg, as Bloomberg's already reported that there'll be a folding iPhone as well. So John Turns is going to have this great moment where you can say the new era of iPhone is here, and I'm the guy in charge that's going to be ushering it in.
I think that's very very important for Apple and to associate John Turner's with this new era. One of the things that Tim Cook is going to continue to do, which I also think is very important, is that he seems to be retaining this role as the kind of chief diplomat Johnald Trump talking about some of that in his social media posts. It will be quite smart for Apple to separate those two functions. John Turners is the man. He's running a company. He's fully focused on doing that.
Tim Cook can deflect some of that attention and be the man who turns up with Tim Cook in the Oval office doing all those things that Apple, I think would prefer not to be doing at all.
Frank, Oh, Tim.
Apple, we have said that line yet, and you call it John Apple in your piece, And how is it in.
This uncharted territory of supply chain?
And when you think about some of the new innovations that Mark German so well spells out for us that are likely on their line.
We've got, you.
Know, maybe a robotic future, maybe at least a video TV that moves around with you that you're able to do the calls on. This is going to be AI integration. How much is John going to be at the heart of that supply chain chain?
Well, that's his entire resume, right, it's in building some of the these new products. We know that He's been across every major product line, I think air pods, as Tom was mentioning just a moment ago. You know, if ambient computing is the new interface, if screens play less of a role in our life, the product that's already in millions of ears around the world is the air pods, And so you know, I do think there is this perhaps overstatement of how vulnerable Apple is to AI because
it's hardware. It's just got such an incredible reputation. And whereas Steve Jobs's innovation was perhaps an individual products, particularly the iPhone, Tim Cook's innovation was in building those products and getting as many of them built as quickly and to the incredibly high standard. When you have a company like open Ai saying we're going to make an AI device is going to be designed by Johnny. I've doing
that in small numbers. Sure, that's a doable task. I think making hundreds of millions of them and competing with Apple, I think it's much more difficult to do that than it is for Apple to learn how to add AI to its devices.
Davely Bloomberg Opinion columnists, thank you very much. As Apple enter as a new chapter under CEO John Turners. From September first, all eyes of focus on what that means for Apple's future hardware cycle. Nabila po Paw is senior research director at IDC and joins us now and you come on this program and we talk about the outlook for handset sales, and we're zeroed in on the iPhone.
The only question for you is whether a change in CEO from Tim Cook to John Turnus changed your outlook for how the iPhone and future generations the iPhone will do this year and beyond.
Thank you for having me. No, that's a great question. And you know.
I would say, and I think as many others right that John Turners is the perfect choice to take Apple into the next era. I mean, like you said yourself, he's a products guy, he's our hardware guy, and you know, I think it's just taking Apple full circle.
Right.
When Tim Cook took the rains from Steve.
Jobs, it was he was taking the rains from a product's innovation like legend, right, And everyone questioned that choice, right that, Okay, how will Apple's reviving you know, the Tim Cook being a supply chain operation guy, and we know what Tim Cook is accomplished that you you know, we've all discussed in terms of how much he added you know, tent growing market capitalization tenfold, growing Apple iPhone is by like thirty percent from seven hundred dollars to
a thousand plus and tons of other you know, accomplishments, expanding especially apples and ecosystem. But he couldn't have done all of that, you know, much more of course without really having those rains. You can't become a global company without controlling supply chain operations. So now that that all has been accomplished, and you know, kind of in smooth clay, it's just coming with John Turners's appointment is bringing Apple back full circle back to the product's guye right, who
will leverage his engineering and hardware expertise. And he's already had his hands on, you know, being the chief architecture or being involved in.
Many of the products.
But taking Apple to the next level, you know, the next big iPhone like innovative product into the next era.
So I'm really excited.
We're looking at the image that Apple published of on turn us with with Tim Cook taking a walk on Apple Park campus Cooopatino. What's the environment that this transition takes place in. You give an annual forecast, you talk about the macro factors that are impacting the smartphone market right now, what is it that John Turnis is taking on.
It's definitely he's got big shoes to Phil Phil right, given everything that Tim Cook is accomplished in his tenure, you know, but but he's young, that fifty, He's got a long you know, runway ahead of him. And I think the most prominent challenge right now, aside from coming up with that big innovated product, is to navigate Apple
through this memory shortage. Its like, you know, crisis, which is again, you know, a very kind of app the alley of Tim Cook, right, So that might be the question, Okay,
how is John Turner's going to navigate that? And Apple's already proved to investors, to consumers or anyone in the industry that despite what's already happening, because this is you know, this is not memory crisis is something we're in today and we'refore Apple had was one of the few companies in the top five to show positive year and your growth in Q one, and we expect Apple to be you know, probably best position this year to gain share.
But right you know, you wonder if this change's leadership will impact that stronghold.
But you know, having.
And the other concern I had earlier when we were talking about you know, John Turner's as the heir apparent is how.
Will he navigate geopolitics right?
How will he balance do play that balancing act that Tim Cook has done so perfectly over the years, taking Apple through the pandemic or the terrorist crisis, getting so many exceptions for Apple, if not the entire smartphone and consumer devices category right, So how will how will he any other CEO manage that?
So?
I think they solve that puzzle perfectly with keeping Tim Cook on as executive chairman to still balance that.
I mean and handle that.
Can I jump in on give us how much John Turners has already own that sophistication when it comes to supply chain. It was through his navigation that well apples so in control of their own chips. He had to make that move right and help we even navigate from Intel to.
Homegrown absolutely, and that not only helped in terms of bringing you know, excellent products with better performance and efficiency, but also really helped you know Margins right, and you were as a company having access to your own supply chip set. It's just it's it's he has already proven himself, which is why he's won the the the confidence of the board, which which gave him you know, unanimous vote to put him in in this new leadership position and
also investors. Right, and we've we've already seen Apple put him in the leadership seat with leading the launch of the MacBook Neo, which again I think he had you know, he had a chief rolland right, bringing using leveraging smartphone chip into that and bringing that the price point that no one ever thought that a premium you know, mac premium like MacBook would be available at They're going to break another few records in that category as.
Well this year.
And it is integral and design of iPad for example, NI push us forward fifteen years, that's too hard problems five years? Yeah, Does market share remain the same for Apple if guided? Well?
Absolutely, If not, I think Apple has already well positioned to grow. They will see a few points share growth both in the PC category thanks to the MacBook Neo as well as in the smartphone category because of its you know, continued pushing premiumization and really perfect timing. I think the memory crisis is probably you know, it's bad news for everyone, but it just you know, miraculously again
works out for an Apple's favor. So I think five years down the line, especially with the new products that are on the table, right, we've talked about what the rumors around Apple. The glasses whatever they're going to be called with an iPhone fold that is coming out as soon as the rains are handed over, and that's going to fall in John Don's tenure, right, and other products
and robotics and tabletop robotics whatever those products entail. So definitely in the old consumer devices space, Apple tens is very likely to continue to gain share and be a market leader.
Jambella Povol, it's great to have you from IDC. Thankanks for your time today.
Welcome back to a special edition of Bloomberg Tech. We are near session lows on Apple. Last night when news broke that Tim Cook would be stepping down as CEO on September first, becoming executive chair, and that John Turnus, the hardware chief, would be taking on the CEO role, there was this muted reaction. Apple hardly moved, Its suppliers hardly moved. We are three hours or more into the session and with time, investors are digesting this. The stock underperforming.
It is down almost three percent, while major indices are flat. But people have had time to read Bloomberg's reporting, read the analysis and make up their mind on what this means.
Karra, Yeah, while we delve more into what it means.
Because Apple's post Tim Cook, here are signals a strategic continuity over disruption. Bloomberg Intelligence analysts say they expect Apple to focus on its core ecosystem for a look at the road ahead and the massive shoes turnus now has to fill, especially in China.
Bis Anna rag Rana joins.
Us now, who is one of the first out the gate with this take and a consistency. What does that mean in terms of turnus being able to drive the supply chain that in many ways Tim Cook has still navigated and will do his exec chair Yeah.
I think this has been his legacy, the supply chain. It is really remarkable for a company to maintain March. It's this high despite everything that's going on from tariffs to memory prices, et cetera. I mean, is done a phenomenal job. I was last night. I started to look at ratturns and you know, look at them over the last from the day he took on till yesterday compounded annual growth rate of over twenty four percent, and S and P at that time period is at fifteen percent,
So massive outperformance on that end. You know, it's done a phenomenal job of creating an ecosystem. You know, some will say that services is the future of Apple, but in our view, the services is nowhere unless you have the devices that rives the ecosystem. So from our side, I think this basically says Apple at the heart is a hardware company and will remain one of those.
So let's be more specific about that. You write in your research that Apple could even sharpen its hardware strategy. What do you mean by that? What would that look like to you?
See? One of the biggest complaints that we have heard almost for almost a decade now is that there is no real innovation in the iPhone, for example, it is still the same. We haven't even seen a foldable device come out at this point compared to Samsung, who's launched it several years ago. So you can anticipate that if your heart is really in hardware, you're going to have
a lot more focus in that area. We saw that with Microsoft and Satya when Satya came on Cloud was at the center of his older job and that really made the big difference, and in fact that has been the primary growth friber for Microsoft. So we anticipate a lot more work to be done on the hardware side and see what he does with it.
Talk about a foldable phone.
We talk about how AI is going to be adopted in many ways as a black eye that they're having to turn to a key rival to Google for the underpinnings of Siri. But how do you think John Turnus really thinks about that integration and becoming more self sufficient in the future.
Yeah, I return to Google for search. I mean, why not go to the provider that has the best technology. So right now they think Google CM and I has the best model, they're going to use it in their own models. On top of that, it's they're going to allow CD to tap into any AI network that's out there. I think at this point, with models changing so dramatically, you don't want to be basically bound by one ecosystem,
whether that's Anthropic, Gemini or any or open AI. You do want to have their flexibility for your users to tap into any LM what they want. And I think that's what Apple's done. Look at their capex, I mean three percent of revenues compared to Microsoft which is now over forty percent.
Bloomberg Intelligence is Anna ag Rhana with the key React research on the Bloomberg tumminel.
You should read it.
Annah, Rag's beIN at this a long time. Thank you for joining us on the special show, What a Day, What a Story? Apple shares after a few hours of the world digesting the news that Tim Cook is stepping down as CEO and John Turner steps in as CEO effective September. First, the stock is down more significantly, but it took a while.
It took a while for the digestion to go on, and really the optimism is still among the analyst community. We've got forty buyers on this stock just two cells, and many still thinking that this is a continuity play. But there is an element of risk here as we see Tim Cook go up to more of a political role or that diplomatic role two and a half.
For the big.
Headline is that after fifteen years he steps back as CEO. But the other big story is that he has a new role executive chairman, where he is focused on policymakers and the President of the United States posting on True Social in response to this news is pretty telling, right, there's a.
Lot of love for this guy.
An amazing career, he says, an incredible guy.
I mean, there is a lot more to this post.
Some of it's well, it makes light at the fact that he wants called him Tim Apple. Of course many will forever remember. But here is someone who's managed over two administrations of Trump to really navigate what are some really difficult headwinds. He's managed to expand out supply chain India, Vietnam, but still very dependent on China and still something he has to.
Work up as execution.
And the net result was Apple committing six hundred billion dollars to the United States over four years. Let's bring up the image of outgoing CEO Tim Cook and incoming CEO John Turnis. The timing was a surprise.
Same same difference.
This is what Apple published, by the way, this photo. But it's a surprise because Apple just celebrated fifty years and in a number of interviews, Tim Cook kind of indicated he wasn't going anywhere, but the fact that John Turnis was their apparent not to surprise, as it was detailed in detail by Bloomberg News.
Yeah a month ago, March twenty second, Mark Gooman puts out the thought leadership piece about how John Turners is now having his time in the spotlight, introducing new categories of product and a man who's going to be developing and giving us all to the world.
A lot more of than to come.
He's a hardware guy, he's an engineering guy, and he's the continuity candidate. And we're still trying to work out what happens in the next era of Apple.
That does it.
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