On April 20, 2026, Apple announced that Cook would step down on September 1, and his successor is Senior Vice President of Hardware Engineering, John Ternus. He is the engineer behind Vision Pro and has been responsible for almost all of Apple’s major hardware over the past fifteen years.

This is Apple’s first leadership change in 15 years. The signal widely interpreted by the outside world is “hardware returns.” But the internal structure of hardware is far more complex than this label suggests. On the same day Apple announced the leadership change, it also issued another personnel appointment: Johnny Srouji, head of chip engineering, will succeed John Ternus as Chief Hardware Officer.

Ternus has worked at Apple for over 25 years, leading the engineering design of iPhone, Mac, iPad, Apple Watch, AirPods, and Vision Pro. The outside world read his succession as a “hardware return” signal. But at the very moment he became CEO, he handed over the daily management of hardware engineering. What he is set to lead are software, AI, services, and Apple’s overall strategic direction. These four areas are ones he has never led in his 25 years at Apple.

Inside the Realm of Hardware Kings, It’s Not Smooth Sailing

Looking back at Ternus’s 25-year career at Apple, the first association most likely to come to mind regarding his recent performance is “Vision Pro failure.” But his mistakes predate this.

Ternus was a key supporter of the MacBook Pro Touch Bar. This touch-sensitive function key introduced in 2016 was quietly abandoned by Apple in 2021. He was also deeply involved in promoting the butterfly keyboard. Known for its ultra-thin design and notorious for faults, this keyboard design led to a class-action lawsuit from consumers and was eventually replaced across all products. Both failures cost users and Apple’s reputation.

Vision Pro is the third. According to IDC data, Apple shipped about 390k units in 2024, below the analyst forecast of around 600k units, with a fulfillment rate of about 65%. In 2025, shipments further dropped to less than 90k units, and Apple subsequently cut production, with contract manufacturer Lianbao halting related lines. A product priced at $3,499, defined by Apple as the “gateway to the era of spatial computing,” completed its entire lifecycle—from launch to phase-out—in just two years.

The successful side also deserves individual attention.

The first is Apple Silicon transition. In November 2020, the M1 chip was released, launching Apple’s project to migrate entirely from Intel architecture to self-designed processors, with Ternus as a key driver. According to Apple’s annual report, Mac revenue experienced rare explosive growth for two consecutive years after the M1 launch, with FY2021 up 23% year-over-year, and FY2022 up another 14%, reaching a historic peak of $40.2 billion in FY2022.

This opened up the possibility for Apple’s vertical integration of chip design and truly freed Macs from Intel’s product cadence. The second is AirPods. During his vice-presidency, he transformed the wearables category from a marginal product line into a pillar with annual revenue exceeding $30 billion. This became Apple’s third major product category in consumer electronics after iPhone and Mac.

A pattern emerges in this record: his successful bets were on integrating decisive technology into mature categories (M1 for Mac, AirPods for wireless audio). His failures were attempts to define a completely new computing paradigm through hardware. Touch Bar aimed to redefine keyboard interaction but failed. Vision Pro aimed to define spatial computing but failed.

On the other hand, Apple treats hardware as a whole, but the stories inside hardware are far more complex than “iPhone sells well.” According to Apple’s annual reports, from FY2020 to FY2025, when Ternus was fully in charge of hardware engineering, four major categories followed very different trajectories. iPhone maintained dominance, with revenue steadily rising from $137.8 billion to $209.6 billion over six years, though growth slowed.

Mac experienced a real boom after M1, then a sharp decline in FY2023, nearly 27%, followed by a slow recovery that has not yet returned to peak levels. Wearables grew from $30.6 billion to a peak of $41.2 billion, then fell back to $35.7 billion, crossing the growth inflection point. iPad was the most subdued, fluctuating between $26.7 billion and $31.9 billion over six years, with no structural explosion.

iPhone held the line, relying on inertia. The only true structural explosion was during the two years driven by M1. Now he is handing over hardware engineering to Srouji and focusing on managing Apple as a whole.

The Bill Cook Left Behind

The financial structure of Apple when Ternus took over is completely different from fifteen years ago.

According to Apple’s annual reports (10-K), service revenue grew from $19.9 billion in 2015 to $109.2 billion in FY2025, with a compound annual growth rate exceeding 18%, and its share of total revenue increased from 8.5% to 26.3%. Meanwhile, product revenue increased from $213.9 billion to $307 billion, but its proportion shrank from 91.5% to less than 74%. Over 15 years, Cook completely reshaped the profit logic of a hardware company, relying on services.

This reshaping has a clear numerical footnote. According to Apple’s annual reports, in 2017, the gross margin for Apple’s services segment was about 55%, while the product segment was about 34.2%, a gap of 20.8 percentage points. By FY2025, service gross margin rose to 75%, while product gross margin remained roughly flat at 36.8%, widening the gap to 38.2 percentage points. Every dollar shifted from products to services contributes about 38 cents more in gross profit.

This margin gap will not narrow just because of a change in CEO. If Ternus reallocates resources toward hardware, with product gross margins near 37%, which is not low in itself, the potential for improvement relies almost entirely on product premium rather than structural shifts. It’s an arithmetic problem, not a choice.

Another detail most reports overlook: when Cook steps down as CEO, he will become Chairman of the Board. This is not an honorary title. The Chairman usually retains substantial influence over strategic direction, participates in major decisions, and represents the company externally in political and industry matters. The current non-executive Chairman, Arthur Levinson, will simultaneously become Lead Independent Director.

This transition is not like Jobs’s 2011 resignation and immediate departure. Cook will remain on the chessboard.

Ternus’s style is described as calm, focused, approachable—building influence through product achievements rather than personal image, similar to Cook. This similarity is a stabilizing factor during the transition, but it also means that the market’s expectation of a “clean slate” or radical reset is not part of this leadership change.

The Apple Ternus inherits, the last time it answered “what is the next computing platform,” was with a $3,499 headset. With fewer than 90,000 units shipped, it has already been discontinued.