New Apple CEO John Ternus is inheriting a pressure cooker

• John Ternus is set to become Apple's CEO at a high-pressure moment for the tech giant.
• Ternus is inheriting AI struggles, a talent exodus, and other challenges.
• He'll also have to balance global relations and product innovation.

Get ready, John Ternus. It's your turn in the hot seat.

When Ternus takes the reins as Apple's CEO later this year, he'll not only step into one of the most coveted jobs in business but also inherit complex challenges from his predecessor, Tim Cook.

There's no denying Cook was pivotal in Apple's growth and dominance — the company's stock is up nearly 2,000% since he took over in 2011. The past two years, though, have been marked by hurdles for the company. When he takes the helm, Ternus will be tasked with righting Apple's AI ship, retaining and growing its talent bench, and proving that Apple is still capable of launching the next big thing.

"You can keep milking the same cow forever, and it's not terrible, but at some point the cow dies," Glenn Reid, a former engineering director behind the editing tools iMovie and iPhoto, told Business Insider.

The cow in question is Apple's existing product pipeline — the iPhone, Mac, iPad — which was shaped during the Steve Jobs era. Cook is handing Ternus the keys after what the outgoing CEO described as an "unprecedented" holiday quarter for iPhone demand with record revenue, including in its services business.

Ternus, like Jobs, is a "product guy" who comes from Apple's hardware engineering division, rather than the operational side of the business that Cook hailed from.

Now that Ternus is set to take charge, the pressure is on to define a bold new vision.

"While Tim Cook was a legend and will be missed, Apple needs new leadership at the top to move beyond the iPhone and into the AI era," Shaon Baqui, technology research analyst at Janus Henderson, wrote in a memo.

Apple did not respond to a request for comment.

The AI elephant in the room

When Cook became CEO, artificial intelligence was far from the public consciousness. That's changed since ChatGPT went mainstream in 2022, igniting competition and hefty investment in AI among tech giants.

"AI has redefined what legacy means" — especially for tech leaders, Martha Heller, CEO of Heller, a specialized technology executive search firm, previously told Business Insider.

Apple was caught flat-footed in the AI race and has stumbled out of the gate. In an embarrassing setback, Apple delayed its AI-overhauled Siri after determining it wasn't ready. And as the company retooled its Apple Intelligence AI product in an effort to boost device upgrades, some of its top talent have defected to rivals.

The company's latest move to supercharge Siri through a partnership with Google's Gemini was seen by some in tech as an admission that its internally developed AI models couldn't cut it.

Apple is expected to give an update on its AI progress at its annual Worldwide Developers Conference in June, a few months before Ternus steps into his new role.

"There will be a lot of pressure on Ternus to produce success out of the gates, especially on the AI front," Wedbush analyst Dan Ives said in a note after Ternus's appointment. "Apple cannot watch the AI era from the sidelines," he said in a subsequent note.

Compared to tech giants Google and Microsoft, Apple has invested modestly in AI. That could prove to be its superpower, rather than its Achilles' heel. Wall Street has been tough on companies that pour too much money into technology without a clear return on investment, and it could still prove to be a losing game that Apple is sitting out of.

The talent wars

Ternus also faces pressure to help Apple, long considered a tech dream job, retain talent to fuel future innovation.

Over the past year, several AI researchers have left Apple for rivals, including former engineering head Frank Chu, who went to Meta in July.

Jony Ive, who was pivotal in designing the iPhone, iPad, Watch, and a slew of other famous Apple products, is now working at OpenAI on rival AI devices.

Then, there's natural attrition as some on Apple's leadership team age out of their roles. John Giannandrea, Apple's former senior vice president of machine learning and AI strategy, is retiring in the spring and is one of a handful of longtime leaders on the way out.

Apple, which is famous for resisting large acquisitions, may have to rethink its approach if it wants to bring in more top talent.

"Ternus bringing in more innovation from the outside and changing course on the anti-M&A strategy at Apple will be important looking forward," Ives wrote.

That may have started. Apple said in January that it had acquired Israeli AI startup Q.ai, which uses imaging and machine learning to enhance audio capabilities. Its 100 employees, including its leaders, are joining Apple, Reuters reported.

A diplomatic dilemma

On the diplomatic front, Ternus has big shoes to fill.

Cook was pivotal in expanding Apple's presence in China and helping the company navigate tariffs and supply chain challenges by getting on President Donald Trump's good side.

"Cook has walked that political tightrope with considerable dexterity, but the high degree of economic policy uncertainty and volatility will require him to continue steering the ship with an even hand," Forrester analyst Dipanjan Chatterjee told Business Insider earlier this year.

As trade talks between the US and China continue, Ternus will need to closely monitor a key region.

He won't have to handle it alone. Cook is staying on at Apple as executive chairman, a role that includes "engaging with policymakers around the world," the company said.

But the buck will stop at Ternus, who will have to learn to be "10% politician," Ives said. He will have to navigate whatever agreements are made, negotiate new tariffs, and manage the challenges of having a personal relationship with Trump.

Finding the next big thing

Ternus' hardware experience stands out in an area that has eluded Cook.

Apple observers have criticized Cook for his inability to introduce a product as revolutionary as the iPhone.

While he had wins with the Apple Watch and AirPods, the prohibitively expensive Apple Vision Pro flopped, and Cook scrapped the autonomous electric vehicle that the company had invested billions and multiple years in.

Ternus, who has worked on AirPods and every generation of the iPad, is much more familiar with that side of the business than Cook ever was.

"Ternus represents a quiet pivot back toward product intimacy, a tighter coupling between hardware, software, and emerging AI capabilities," Chatterjee said.

Reid said it's encouraging that Ternus has a background in engineering because he'd have a natural focus on product.

"Hopefully, he will change a few things around and hit the reset button," Reid said.