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- [00:00]
A
Massive, massive news. Tim Cook to step down at Apple. This broke yesterday. Garminator had the scoop. Of course. He's coming on the show later today, but it's on the COVID of the Wall Street Journal today. Heavily predicted, often debated. It's a time to reflect on Tim Cook's legacy and what's up next for John Ternus, the longtime insider.
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B
We just said incredibly well executed, incredibly smooth. They sort of telegraphed it. It wasn't a surprise.
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A
Yes.
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B
That was already fully priced in.
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A
Yes.
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B
I personally was hoping that the market would give TIM COOK A 21% salute.
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A
Yes.
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B
Where when the news went out, it just immediately nukes.
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A
21 massive red candle. Let everyone know. This is. We don't like the sign of we love him. It's a sign of we will miss him.
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B
Of course, rebound immediately.
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A
Yes.
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B
But I think that's something that the market collectively.
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A
Yes.
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B
Should try to do for.
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A
Yes. More symbolism in the candle for sure. Chartology is really the key thing. 21% still nearly a $4 trillion company. They're doing fine and they're cooking. So let's go through a little bit of the review of the news and some of the previous discussions that we've had around Tim Cook and John Ternus because we're going to be learning a lot more about John Ternus. He's probably going to do a lot more content, a lot more media, a lot more interviews and we will be hearing from him at keynote events for probably over a decade, maybe two decades. We will see. So in January, Bloomberg reporter, German, who's coming on the show later today, predicted that John Ternus would succeed Tim Cook as Apple's next CEO.
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B
Let's just pull up this clip. We have to give some credit to
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A
the German, to the Germinator. He didn't predict it on our show first. I think he scooped it and posted it.
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B
I know, I know. But we have. This was back in January. I dropped the clip.
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C
Everyone else on the Apple executive team, late 50s through their mid-60s, turning 66 this year. In the case of Tim Cook, your Apple's board, you like continuity. You like an insider. You like people who know what they're doing, have been there for a while. They know where the bodies are buried. Okay. These guys are all have hundreds of millions of dollars, if not more.
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B
Pause. I love Mark Gurman so much.
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He's the best.
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B
He's truly the best.
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A
And he's coming on at 50.
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C
He's the only one who is. If let's say Tim Cook hangs out another three to five years. You're not going to point another CEO who's 65, 70 years old, he's the only guy Apple, they get vast majority of the revenue from hardware. He's the hardware guy?
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A
Yep.
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C
Have they screwed up any hardware since he's been in charge? No, he's a steady hand. He knows what he's doing. He's really the only choice. You know, there was this New York Times report a few weeks ago, basically saying that could be Greg Joswiak, could be Eddie Q, could be Deirdre o', Brien, could be Craig Federighi. It's for sure not going to be Craig, it's not going to be Deirdre, it's not going to be Eddie, it's not going to be Jaws. The only category that makes sense is an operations person. Because you look at the current CEO, Tim obviously comes out of the ops world. You look at the guy who would have been CEO if Tim Cook didn't stay so long. I'm not saying he shouldn't have stayed so long. He's done, obviously, a fantastic job for shareholders and employees and what have you. Would have been Jeff Williams, he was the coo. So Sabi Khan, he was named coo know a few months ago, but he's really been in that job for the last half a decade, I would say. So anyways, it'll be Turnus or Sabi or someone completely out of left field. I don't think this is imminent, so we'll see what ultimately happens. But all signs are turning towards Turnus. Everyone has an opinion that Turnus is going to be getting the CEO fine from you. I've been shouting this from rooftops the last two years, but no one has given evidence. Like, what is this based on?
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B
Right.
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C
Has there ever been a baton handoff? Is he getting more responsibility?
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B
Well, have a. Like a big baton. We've got one of these.
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C
You know what you have? You have white smoke coming out of.
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A
Well, actually smoke.
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C
Very environmental. So
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A
is that the end of the clip?
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B
You know, maybe they have a comically large baton. Like. Like we have our scoop.
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A
Yeah. Oh, Mark Gurman, the Scoopinator. He's scoop, doggy dog, Scoop, athlete. The scoop. The scoop. The scoop is on fire. Yesterday evening, Mark was the one with the scoop. Tim Cook will assume the role of Apple's executive chairman and John Ternus will take the reins of the company. Mark followed up with a scoop with internal memos from both Cook and Ternus announcing the transition. I don't. I mean, I understand, I don't I don't know, maybe I don't understand what it's like to be 65, but I was always optimistic that the Warren Buffett 65 to 95 would be the new trend and that people would just say, you know what, Tim Cook's healthy.
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B
He's going, he's everything to date was a warm up. Yeah, it's time to go on the actual run.
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A
That's, I would, I mean, I totally understand.
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B
He's like, I got another Neo, I got another 10X. I'm going to, I'm taking us to 40 trillion.
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A
Yeah, I don't know, I mean, maybe Warren Buffett's in a different world because he's more of an investor. Maybe doesn't need to travel as much, doesn't need to be in the arena shaking hands, kissing babies, doing product launches, being in dc, getting wrangled into things. Buffett can be more hands off and just sort of read the news, review
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B
the financials and delegate with some liquidity if needed.
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A
Yeah, it's a more hands off role. I mean, I imagine that the role of CEO of Apple is incredibly demanding, but I liked the idea of just, just locking in and being like, oh yeah, I'm 65. Everyone expects me to, everyone expects me to step down, but I got another 30 years in me. But, you know, he, he chose a different path and he is retiring or stepping into the executive chairman role. Ben Thompson published Tim Cook's Impeccable Timing, which eulogizes Cook's impressive accomplishments as the head of Apple. Ben Thompson kicks it off with an interesting thing. He says it's the nature of business that the eulogy for a chief executive doesn't happen when they die, but when they retire. Or in the case of App CEO Tim Cook announced that they will step up to the role of executive chairman on September 1st. One morbid exception is when the CEO does die on the job or quits because they're dying. But the truth of the matter is that where any honest recounting of Cook's incredibly successful tenure as Apple's CEO, particularly from a financial perspective, has to begin with the numbers. And he says that the numbers are extraordinary. Cook became CEO of Apple on August 24, 2011, and in the intervening 15 years, revenue has increased 303%, profit surged 354%. And the value of Apple has gone from a mere 297 billion to over 4 trillion, a staggering 1,251% increase. And there was some chatter back and forth on the timeline over Whether Tim Cook had simply put Apple on cruise control and lucked out as many big names in tech also saw 10 to 40x increases in their market caps. This is from Brandon Gorell's newsletter@tvpn.com you can sign up today. But this interpretation ignores the fact that many of the biggest public tech companies in 1980, when Apple IPO'd, are no longer even close to the top of the pack anymore. And Brandon cites Xerox, Motorola, Texas instruments, IBM and HP, which all fell by the wayside over the past 30 years while Apple built the biggest consumer hardware company on the planet and thrived in the public market. And I was doing some digging on this as well. I pulled up. It's easy to look at like well, zoom Back to the Mag 7. All of the Mag 7 have done fantastically well over the past 15 years during Tim Cook's tenure. Did he do anything special? Is he in a different category in some way? And maybe not when you look at, when you look backwards from the current Mag 7, but if you go back to 2011 when Tim Cook took the reins and you look at what were the biggest tech companies there then and how have they performed, it does look like outperformance because Apple was at 377 billion. That was, you know, big, huge. The biggest company at the time.
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B
Then Microsoft told what what their peers were at the time where he took the helm.
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A
And to be clear, Apple, Microsoft, Google and Amazon were clearly there. Fang was the term at the time. Facebook, Amazon, Apple, Netflix, Google. For some reason Microsoft didn't make the cut in that acronym. That has since changed of course, but there were a lot of companies that didn't go on as significant of runs. You have IBM, Oracle, Intel, Cisco, Qualcomm and HP, all that were in the the top 10. They were sort of the mag 10 of 2011 and now they are not in the mag 7, although many of them have done very well. This was our take from a long time. You know, we like to harp on the failure of Apple Intelligence and how Siri is ineffective sometimes and the FaceTime interface is odd and the new iPhotos app is hard to use.
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B
But where it matters, we give them credit on genmoji.
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A
No, where it matters is did they navigate tariffs, did they navigate supply chain, did they navigate the transition to Apple Silicon delivering a great product consistently that doesn't break. Like we have ordered so many Apple devices throughout building tvpn. And there was a time when you would get a new consumer product and it would just be oh, it's a bad one. I got a bad one and I gotta take it back. And that's never happened. The quality control is flawless. And navigating a very, very difficult chip export act From Biden in 2022 all the way to the Trump tariffs to different political swings back and forth and back and forth. And Tim Cook has just done a great job of like keeping the wheels on the train going down the track and I think that should be celebrated. Even though this features to be under
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B
appreciated because he wasn't the visionary that Steve was. But he also never, I don't think he ever wanted to be seen in that way. But the consistent operational excellence over almost two decades is almost unprecedented at this scale. Yeah, just the way you put it. Right. The same experience that I had getting a new Apple computer as like a teenager I have today, it is actually almost remarkable how similar the experience is. You open this wonderful box, you get a great device, it works for a long time and you still get that today. So the consistency. Yeah, I think he will just get more. When people kind of process the run over time he will just get more and more respect.
- [11:08]
A
Yeah. And a lot of the other computer manufacturers have had to go into bloatware and preinstalled software and Apple's been very good at holding the line there. They've of course ramped up their services business, integrated advertising in places that were somewhat unexpected since that was always how they were counter positioned against Google. But they've done it in a way that hasn't been that annoying. I feel like I don't see that many people complaining about ads in the App Store. People see the ads and they're like, wow, this company is bidding on the keyword for their direct competitor. That is, you know, extremely competitive behavior. The same thing happens on Google. Didn't expect to see it in the Apple ecosystem. Of course it's going to happen.
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B
Raghav in the chat says not a single product recall under Tim Cook is that possible.
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A
Wow.
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B
I think that is incorrect. What did the recall says? They recalled a 15 inch MacBook Pro in 2019, the AC wall plug adapter in 2016. 2019 battery gate service Pro.
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A
They've had some back and forth, a very, very successful run. The other two things that the chat was mentioning was the Apple car and the failure of that program. Maybe a little bit. They bit off too much, more than they could chew. I think looking at what's happened in China with every phone manufacturer launching a car, that's extremely impressive. I would have Loved to see Apple execute there. And I think that would have been very good for the American technology industry, electric vehicle industry, a variety of different American industrial efforts. But it was not to be, unfortunately. And then there's the Apple Vision Pro, which I think a lot of people, you know, look at the churn rates, look at the retention rates and they just see it as an underwhelming product. I still like it, but I'm in the minority and I acknowledge that fully. I do think that they made the right decision to turn it into a home cinema, a home theater. Like they understood that there was not enough of a video game library, a VR game library to plug into in any meaningful way. And so they made the decision. I think one of the lead staff members on the Apple Vision Pro project was from the Dolby Cinema team which had done Dolby Vision and some of the actual theater build outs. And so they were able to bring that experience and understand what actually makes for a great movie watching experience in a premier cinema. And how can we recreate as much of that as possible in VR? Still obviously didn't hit the mark fully because the product has not taken off by any stretch of the imagination. But overall it was a fun project and I'm hoping that they continue that it might wind up pivoting into just camera glasses and they'll go up against the meta Ray bans, which might be the more prudent, you know, business strategy. But I still, I still like, you know, these incredible investments in VR. What are you laughing at?
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B
Josh over at Semaphore. Yeah, says nobody tell the new Apple CEO that he has a streaming service. We've got a good thing going here. Lighting, iPhone and AirPods money on fire to make great movies and shows and we don't need that getting any extra attention right now. Yeah, 5,000 likes.
- [14:22]
A
Yeah, it is interesting. Yeah, Turnus is about as far as you can be from the Apple TV services organization. But I don't know, I talked to, I talked to a filmmaker in Hollywood, a very successful filmmaker. Like years and years ago, before the, before Apple TV was really ramping up. And he was saying that Apple's brand is so prestigious that it's sort of antithetical to the Hollywood mindset, which is much more VC risk on. You're going to have flops like every, every movie studio understands that it is impossible to predict the perfect success and have the level of polish that comes from these slight iterations. I think you could Apples different for sure. And so it's a different culture because if you have Apple's. Apple hasn't. I mean they've had like flops but even the flops, like they still feel like very on brand. They don't have like a silly movie that is just like bad and running that risk was always a problem. But I feel like Apple navigated it really really well, especially with the F1 1 project and has done really well with the content side. And they have held a brand standard that feels almost at the level of HBO pretty quickly. Whereas some of the other streaming services have kind of gone more scattershot, more reality tv, more sort of silly projects that might entertain viewers but don't fully. They don't create a cohesive brand idea of what am I getting when I open that particular app on the Apple product tv. Mark Gurman said on TVPN in January that Turnus really viewed, really is viewed as the ultimate hardware guy at Apple. Ralph Winkler at the Wall Street Journal published an article yesterday detailing Ternus pedigree with physical products. Quote if Jobs was a product visionary and Cook a supply chain guru. Ternus is a hardware savant who exists somewhere in the middle. Turnus who has a background in mechanical engineering and has been working at Apple for 25 years and most recently led hardware engineering of all of Apple's products. He played a crucial role in the development of Apple AirPods, obviously a massive success and he redesigned Apple's computers to use company designed chips instead of Intel's, a massive move that extended battery life and improved performance.
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B
So Turnus is and set them up very well for AI. AI yeah.
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A
Turnus is taking over Apple at a time when the company has largely sat on the sidelines of the AI race, going so far as to outsource the technology powering Siri to Google's Gemini. Turnus will have to, will have to somehow manage this dynamic. Ben Thompson wrote about it In November of 2025 Apple's plans are a bit like the alcoholic who admits they have a drinking problem but promises to limit their intake to social occasions. Namely how exactly does Apple plan on replacing Gemini with its own models when 1 Google has more talent, 2 Google spends far more on infrastructure and 3 Gemini will continue will be continually increasing from the current level.
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B
I mean a number, a number of people have, have talked about, you know, what are the challenges that Ternus is inheriting on supply chain. Right. Kind of like you know, stuck in China in a big way that presents a pretty meaningful risk to the business and then sort of like overall dependency on Google especially on some of these key Products. And we will close out on this. I need your reaction, John. Ferrari's first electric car is priced at the low price of $650,000.
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A
An absolute steal. They're giving them away at that price. It's electric. Right. So you don't have to deal with gasoline. You don't have to.
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B
Do you save a lot on gasoline?
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C
You don't.
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You don't have to deal with all the noise that comes out of a V12.
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B
Yeah, major up save on gas.
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A
Yeah. Oh, well, yeah. I mean, if you're saving on gas and you're driving, I mean, if oil keeps spiking and Gasoline goes to $1,000 a gallon and you're filling up every week, you could easily be spending millions of dollars a year on gasoline in a normal car. So there's potential cost savings here. So it's sort of a more you buy, the more you save situation.
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B
I think Ferrari, Luce, there's really going to be a like, what kind of Ferrari client are you? Moment.
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No, I think it'll be established. If you see someone with this, you
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know they can eat 300 grand of
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depreciation and you know that they are. That they are high on the list for the F90. Like, they are working their way up, buying in now, and when the F90 comes out in a decade, they're getting a call. Yeah, they're getting the call.
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B
Yeah. Very interested to see how this does in the market. And the good thing is, if you are excited about the lucre, but you're not excited about paying $650,000, you will have an opportunity to buy them for far less than that very, very quickly.
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Probably.
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C
Probably.
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B
But thank you for hanging out with us today. It's been an honor and a privilege to be here with you. We hope you have a wonderful afternoon.
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A
Leave us five stars on Apple Podcasts and Spotify. Throw that flashbang. Sign up for our newsletter, tvpn.com good.