A CEO yes AppleTim Cook, is used to being asked about the company’s product strategy, tariffs and artificial intelligence. But, in last Thursday’s earnings call (30), an analyst wanted to know: What advice would he give to his successor?
On Thursday, Apple released its second quarter results and what Cook described as the “best March quarter ever” for the company. It was also the first earnings event since the company announced that Cook will step down as CEO in September, being replaced by John Ternus, head of hardware engineering.
Apple once again exceeded expectations, with revenue of US$111.2 billion, an increase of 17% compared to last year. iPhone revenue reached US$57 billion, practically in line with analysts’ estimates and 22% higher than the previous year.
The numbers highlight the booming business Ternus will inherit — and the pressure he will face to expand Apple’s core products while creating new ones.
On Thursday’s earnings call, Ternus briefly described his approach as CEO, based on what he learned from Cook.
“As you know, one of the hallmarks of Tim’s management has been the deep reflection, consideration and discipline in making the company’s financial decisions,” he said, adding that he intends to continue this approach when he takes over.
Apple AI Plans
Over the past year, analysts and investors have sharply questioned Apple about its AI plans, including the impact the technology could have on products like the iPhone.
On Thursday, Cook reiterated that integrating AI into Apple devices, rather than developing independent software tools, is what sets the company apart.
Apple also said companies are using the Mac for AI applications, including creating and running agents. Kevan Parekh, Apple’s chief financial officer, cited AI startup Perplexity as an example of a Mac customer.
Ternus’ current position as senior vice president of hardware engineering could help the company compete in AI.
The company will announce advances in AI at Apple’s Worldwide Developer Conference in June, Cook said. Apple predicts supply constraints in the second quarter due to increased AI-driven demand for Mac Mini and Mac Studio.
A difficult period for the technology industry
Supply constraints affected the iPhone and Mac during the March quarter, and Apple expects the Mac to be further affected in the June quarter.
Computer makers have been facing memory shortages driven by demand from AI-powered data centers, which caused global smartphone shipments to fall 4.1% in the first quarter, according to market intelligence firm International Data Corporation.
Big companies like Apple have more resources and influence with memory companies, giving them an advantage during shortages, IDC said this month.
Soon, it will be up to Ternus to manage these relationships and Apple’s extensive supply chain.
As executive chairman of the board, Cook will still have influence but will likely play an advisory role.
On Thursday, Cook gave Ternus some advice: Where he spends his time will be one of his most important decisions. He also advised Ternus to never forget Apple’s “lodestar” – creating products that improve people’s lives.
“And if you continue to focus on that and make your decisions based on that, it’s going to create a great business,” Cook said on Thursday’s conference call. “And we will be able to create more products and do it all over again.”
