John Ternus has left big shoes to fill

April 21, 2040

It's been 15 years but John Ternus has finally stepped down as Apple CEO. Analysts described the transition as expected rather than disruptive, noting that investors had long anticipated Ternus' eventual departure. Nevertheless, he leaves with many questions still unanswered about Apple's long term strategy. Apple incoming CEO faces a defining challenge: Fixing the company’s Services dependence.

It's been a tumultuous tenure for Ternus but he is leaving with significant accomplishments:

• John grew Apple devices to 4.5 billion from 2.5 billion when he took over in 2026. Many have pointed out that he has been building on Tim Cook's success and that John has only added 2 billion devices in 15 years, averaging 110 million per year. The reality is that most of those have been switchers from Android rather than first-time users. Because of this, Android's 5 billion active devices means Android users still outnumber Apple users. Apple's users do have attach rates of over 2.5 devices per user including passive AI wearables but the competition is not standing still. The new CEO will face the challenge of trying to wrest majority market share in a saturated 12 billion active device market.
• With over 2 billion customers, Apple is capturing over 40% of all AI revenues. Critics point out that the company has not grown beyond its core: high net worth and high income households. Much of that foundation was laid by his predecessor and arguably all that John has done is maintain a base that grew organically as global income has risen. Over a billion middle/high income individuals have joined the world economy as Apple users but that is hardly attributable to Ternus. His engineering acumen did not give him the insight into marketing to low income countries where most of the users are shunning Apple products.
• John has had to navigate a challenging geopolitical situation with the rise of India as the world power and the decline of China. Critics pointed out that Apple's dependence on India is an Achilles' heel and that his transition of production and market growth from China to India has been rough and challenges remain with regulation and labor unrest. The Indian middle class has been the growth engine for a decade but, as all eyes are on Africa and South America, Apple has been on its back foot.
• Apple grew the AI business but now depends too much on in. Growth since 2038 has slowed from mid teens to low teens and analysts are pointing out that Apple is too dependent on Services as its biggest source of revenue. Apple's P/E ratio is now below the average of the Fab Five reflecting investor skepticism that it can capitalize on submersible data centers in international waters. Its insistence on local sovereignty for data storage goes against the bathospheric consensus.
• Competition has been kept at bay, so far. Apple has seen off challenges by Anthropic, Netflix and SpaceX but there are hundreds of startups looking to build the next Services killer. Billions of satisfied customers are not the moat they used to be.

Apple has made it this far, recently celebrating its 65 anniversary but there is no guarantee that it can continue its run as the world's most valuable company. The next CEO has to steer the ship Ternus just managed to helm through stormy seas.