John Ternus took over as Apple's chief executive on 1 September, eight days before the hardware event that will be his first public appearance in the job.
Apple's competitors in artificial intelligence spent the past few years building models and data centers. Apple did not, and Sebastian Herrera said the company left that ground to others and is now betting that hardware and software are enough.
"Apple's new CEO is taking on a $4.5 trillion company, but there are some problems he needs to tackle first."
Herrera covers Apple for Fortune, published the magazine's feature on the handover the day before this report aired, and spoke for it to current and former Apple employees who had seen Ternus at a recent event.
I listened to the full segment so you can skip it.
Here are the 6 takeaways that matter.
👤 Speaker: Sebastian Herrera, Fortune's tech correspondent, who covers Apple and wrote the magazine's feature on John Ternus taking over as chief executive
🎙️ Host: Ellie Austin, who anchors Fortune Daily, the magazine's daily video show
📰 Published: 1 September 2026 on YouTube (Fortune Daily)
🔴 YouTube | 🟣 Apple Podcasts | ⏱️ 25 min
Key Takeaways
Apple chose not to build AI models or data centers, and that decision is now the new chief executive's problem Herrera says the ground went to competitors including Google
The first public test comes eight days into the job, at a hardware event
The people who have seen Ternus describe someone who does not look nervous about it He sat with ordinary employees rather than take an executive office, and races Porsches in his own time
Apple is second to Samsung on the foldable phone, in a category it usually defines
Securing memory chips is a live operational problem, and Washington has views on where they come from The Trump administration does not want companies sourcing chips from China
Tim Cook stays on as executive chairman, which matters because Ternus has less political experience
1. A $4.5T company, day one
Herrera opened on the size of what changes hands and the fact that it is not a clean inheritance. "Apple's new CEO is taking on a $4.5 trillion company, but there are some problems he needs to tackle first."
The timing puts a product launch immediately in front of him. "This is right before Apple's big hardware event on September 9th. That'll be his big public debut." Ternus took over on 1 September
Herrera said he spoke to current and former Apple employees who had seen Ternus at a recent event, and that they described him as confident and at ease for someone about to step into the top job
2. Who Ternus is
The reputation inside the company is built on where he chose to sit. "He's been called the man of the people because he's sat with regular Apple employees when he could have had his own executive offices and he used to compete on his university swim team."
The detail Herrera added last is the one that will follow him. "Also, he likes to race Porsches on his free time."
3. The AI ground Apple ceded
The strategic question is a decision already taken, not one still open. "So, Apple chose not to invest in AI model making or data centers" — Herrera said that ground has largely gone to competitors such as Google
What is left is a bet on Apple's existing strengths. He said the open question is whether a strategy built on hardware and software expertise is enough in the AI era
Analysts want the strategy narrowed rather than widened. "They need to figure out their exact lane in AI and where they can win."
The competitive set has changed shape, and it now runs in both directions. "Competitors like OpenAI and Meta are now in the hardware game and he needs to help Apple refine its AI strategy."
4. The product design problem
The hope Herrera heard most often is not about AI at all. "And then a lot of people that I've spoken to are really hoping that Apple can bring back some of its product design mojo." He said people want Ternus to delight and surprise consumers the way Apple did in the Steve Jobs era
Analysts frame the same point as an engineering problem. Herrera said they told him Apple has to stay ahead of the product engineering curve, having fallen behind on some products in recent years
The example is a category Apple has not led. "So for example, Samsung has long had a foldable phone out there and Apple is coming second behind them."
5. Chips, memory and Washington
One hurdle is a supply problem rather than a strategy problem. Herrera said Ternus has to work out how to get more memory chips
Where those chips come from is a political question. He said one factor Ternus has to consider is that the Trump administration does not want companies sourcing their chips from China
The third analyst instruction is to press the advantage Ternus himself built. Herrera said Apple needs to capitalize on its own silicon strategy, and that Ternus was part of the move away from Intel chips to Apple's own
The political relationship is the one place Herrera named a gap. "One thing analysts told me Apple needs to do to remain successful is to continue to be careful navigating the Trump administration." Unlike Tim Cook, he said, this could be a big learning curve, because Ternus does not have as much experience in geopolitics Cook stays on as executive chairman and can help with problems Ternus runs into
6. Not just a phone company
The job itself is bigger than the one Cook started in. "Apple now has multiple business lines like streaming and services." Herrera said Ternus has to maintain all of it while still finding new ways to innovate
And the environment around it has changed. "And things are also a little bit more politically messy now than when Cook started." He put it as a whole new world that Ternus and other chief executives now have to deal with
Bonus Insights
Herrera closed by pointing viewers to his own feature article on Apple's future, published on fortune.com
This report was the third of four segments in the episode. Fortune's investigation into Temu's partnership ads, and business editor Nick Lichtenberg on Gen Z and blue-collar work, are written up separately, and the host's own segment on Shein's public debut is covered in the Temu summary
Herrera's bottom line is that Ternus inherits Apple at its most valuable and with its narrowest set of options: an AI position that has to be defined rather than expanded, memory chips to secure under political constraints, and a relationship with Washington that his predecessor built and he has not.
Products, Companies & Tools Mentioned
Apple (The $4.5 trillion company Ternus took over on 1 September, with a hardware event on 9 September as his first public appearance in the job)
Google (Named as one of the competitors Apple left the AI model and data center ground to)
OpenAI and Meta (The AI companies Herrera says are now in the hardware business, which is Apple's own territory)
Samsung (Has had a foldable phone on sale for years, with Apple coming second behind it)
Intel (The chip supplier Apple moved away from in favor of its own silicon, a program Ternus was part of)
Books & Resources Mentioned
Apple's John Ternus era: Can a low-key engineer win the AI race? – Sebastian Herrera (The Fortune feature this report is drawn from, which Herrera pointed viewers to at the end)
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