When former Apple CEO Steve Jobs passed the reins to Tim Cook in 2011, he left him a simple piece of advice: “Never ask what I would do. Just do the right thing.” Fifteen years later, that advice appears to have paid off. Under Cook, Apple’s market cap has climbed more than 1,000 percent, while annual revenue has nearly quadrupled, to $416 billion last year.
Now, as Cook prepares to step down, he’s passing along guidance of his own to John Ternus, the longtime Apple executive who will take over as CEO in September. Ternus, who joined Apple in 2011 and currently serves as its senior vice president of hardware engineering, will inherit a company at the height of its financial success—along with a fresh set of challenges, including defining Apple’s long-term A.I. strategy.
“For John, I think my advice—or what I’ve told him—is that one of the most important decisions he’ll make is where to spend his time, and I would spend it where the greatest benefit to the company and the users are,” said Cook during Apple’s second quarter earnings call today (April 30). The incoming CEO should also remember that products that enrich lives remain Apple’s “north star,” Cook added.
Cook’s remarks came as Apple beat Wall Street expectations on both revenue and profit. Quarterly sales rose 17 percent year over year to $111.2 billion, while net income increased 19 percent to $29.5 billion. The iPhone led the way, generating $56.9 billion in revenue, a 21 percent jump fueled by the March launch of the iPhone 17e. Cook called the iPhone 17 lineup “the most popular lineup in our history.”
Other segments also posted gains. Mac revenue rose 6 percent to $8.3 billion, supported in part by the introduction of the affordable MacBook Neo. iPad sales increased 8 percent, while wearables, including the Apple Watch, grew 5 percent. Meanwhile, Apple’s services division, which includes Apple News and Apple TV, reached a record $31 billion in revenue.
According to Cook, Apple’s strong performance makes this an ideal moment for a leadership transition. “This moment for the transition is the right one for a number of reasons: First, our business has been performing extremely well,” he said, pointing to both the company’s current strength and its future roadmap. He also described Ternus as the “right leader, ready to step into the role.”
Ternus, for his part, praised Cook’s leadership style, highlighting his thoughtfulness, deliberateness and financial discipline. He said he plans to carry forward these qualities when he assumes the role in September.
Still, Ternus will face significant challenges from day one. Chief among them is Apple’s position in the A.I. arms race. The company is under pressure to prove it can compete against Big Tech companies like Google and Microsoft. Its current approach of rolling out “Apple Intelligence” and relying in part on third-party A.I. models has yet to fully gain traction.
Asked about A.I. monetization, Cook pointed to Apple’s rising investment in research and development as a signal of its ambitions. R&D spending climbed to $11.4 billion this quarter, up from $8.5 billion a year ago. “We’re investing in products and services, and we see opportunities in both of those,” said Cook. “We could not be more excited about how the future is playing out.”
