The subject of succession planning is becoming more and more urgent at Apple. Although Chief Executive Officer Tim Cook has not announced his intention to resign, there is increasing conjecture around his ultimate departure and the choice of his replacement.
Tim Cook took over as CEO of Apple from Steve Jobs over a decade ago and has grown it into a multi-trillion-dollar enterprise. Now, as Cook approaches the usual retirement age, speculation abounds about who will follow him.
Mark Gurman joins presenter David Gura to explore the issues of replacing Cook, prospective successors, and how the choice would affect one of the world’s most well-known companies.
This is a minimally modified transcript of the conversation.
David Gura: Every year, the top executives of Apple, one of the world’s largest and most prominent corporations, are whisked away to an exquisite retreat, usually in Carmel Valley.
That’s approximately 90 miles south of the company’s headquarters in Cupertino, California. As a result, a large number of these executives take buses.
Mark Gurman: They cannot bring their family or assistants. These are the 100 most significant people at Apple.
Gura: Mark Gurman has covered Apple for over 15 years, and he believes this annual meeting is one of the most important days on the corporate calendar.
It’s something that Steve Jobs started.
Gurman: They sit in auditoriums and various chambers at this stunning resort in Northern California. They are taught and shown all of the excellent things that will come from Apple in the coming years.
Gura: According to Mark, it was during this retreat that Apple’s so-called “Top 100” received their first peek at the original iPad.
They saw both the MacBook Air and the Apple Watch. And I obtained updates on the Apple Car project, which the firm recently cancelled.
Gurman: Here’s where you can learn about Apple’s future.
Gura: And, while the majority of the attention is on product presentations and prototypes, Apple’s senior executives are also keeping track of who has been chosen to deliver these presentations.
Gurman: I believe attendees at the event are constantly attempting to figure out who is next in line. Who is in charge?
Gura: Who will finally replace Tim Cook?
For nearly thirteen years, Jobs’ handpicked replacement has served as Apple’s CEO. Previously, he served as Jobs’ deputy.
Gura: At Apple, succession planning is the elephant in the room, and while Cook has not indicated that he intends to leave the company anytime soon, Mark says there is growing speculation about when that will happen, who will be its next CEO, and whether that person is among Apple’s most important people.
Gurman: Cook’s stint at Apple is probably coming to an end, right? He’ll turn 65 next year. He is older than most S&P 500 CEOs.
He’s been at Apple for 25 years, and the company is in a precarious position because the executive team from which they will most likely select their next CEO is all around 60 years old or will be in their mid- to late-sixties by the time Tim Cook retires, leaving the company with very few reasonable options.
Gura: Today on the show:
Finding someone capable of doing one of the most demanding roles in a company is difficult.
Who is in the running, and how would their decision affect a $2.8 trillion company and one of the world’s most well-known brands?
Gura: Tim Cook has been Apple’s CEO for over a decade.
Part of his job entails preparing for who will succeed him. Mark Gurman says it’s not an easy post to fill.
Gura: Is that job description really well-written? In other words, what should an Apple CEO be able to do?
Gurman: An Apple CEO must either be a visionary or bring new goods to market. Alternatively, they must be able to identify the visionary and collaborate with him or her to bring those new items to market.
Gura: When Steve Jobs hired Cook, he knew it would be a struggle.
Gurman: You know, the thing about Cook is that he is all-consuming, and I believe that one of the reasons Jobs appointed him CEO, aside from the fact that he was the most qualified, by a long shot, among the executive team at the time, was that Jobs knew how all-consuming the next era of Apple would be, right?
And Apple has been Tim’s entire life, according to everyone who knows him and with whom you speak.
Gura: Cook became Apple’s CEO in 2011, amid considerable scrutiny.
He succeeded Jobs, the company’s founder, who was battling pancreatic cancer.
In October of that year, Cook stepped into the spotlight, unveiling a new version of the iPhone:
Timothy Cook: Good morning. This is my first product launch after being made CEO. I’m sure you didn’t realize that.
Gura: You can hear him making a joke to make you realize how significant this moment was. He was under enormous pressure, following in Jobs’ footsteps.
Cook: I love apples. And I consider it a life-changing privilege to have worked here for over fourteen years.
Gura: As Apple’s chief operational officer, Cook collaborated with Jobs during a period of rapid growth. When it grew into more than just a computer company.
Cook: We released the original iPod here ten years ago, and it has since revolutionized the way we listen to music.
Gura: Mark, you covered the transition in 2011. What can you tell us about Steve Jobs’ relationship with Tim Cook?
Gurman: They were tight. I would not say they were best buddies. In many ways, I believe they were partners. Steve Jobs was the design genius. He was the one who came up with the ideas for these new items, and Tim Cook was in charge of carrying them out. For all intents and purposes, he was the guy who was able to bring these things to market, manufacture them, and distribute them to retail locations.
And when Steve Jobs stood aside and eventually went away, what Apple lost was sort of that visionary ability to conjure up new types of product categories, new designs, and new user experiences.
Gura: Jobs died on October 5, 2011, a day after Cook debuted the new iPhone.
In the years that followed, Cook ensured that Apple built on the device’s spectacular popularity.
Gurman: The Apple Watch is just an accessory or extension of the iPhone. AirPods are an extension and accessory for the iPhone. What has Tim Cook done?
He has supercharged the product lines that Steve Jobs designed and envisioned. When Steve Jobs died, there was only one iPad model: the iPad 2.
Today, there are at least five iPad models available. The iPhone evolved from one or two models to multiple models. So Tim Cook has been able to get a lot of juice out of the lemons that are the original Apple form factors.
Gura: Under his leadership, Apple expanded its product and service offerings, as well as introduced new accessories.
The corporation expanded into movies and television.
It debuted the Apple Credit Card.
Gurman: At its core, I believe Apple is still primarily a technological firm, but they want to promote themselves as a lifestyle company.
Gura: Now, more than a decade later, do you perceive this firm as Tim Cook’s Apple, or is it still Steve Jobs’ Apple, which Tim Cook is stewarding?
Gurman: I suppose it’s a combination of the two. At its core, Steve Jobs left Apple with something that was more than just good: the iPhone. And Tim Cook, I believe, made the most of what he had. I don’t think anyone could have done a better job following in the footsteps of someone as iconic as Steve Jobs.
Gurman: So, as Apple moves forward, who will be the new leader to guide the company into a new era with a new vision and new products? And it is exactly what Apple needs to develop over the next 15 years.
Gura: There are a few names that come up when discussing CEO succession at Apple.
However, as Mark has observed over the years, there has always been an obvious frontrunner.
Gurman: He is capable of dominating the stage. He can communicate with government leaders from China, Europe, and the United States. If something unexpected occurred to Cook, I doubt Apple would miss a beat.
Gura: So, who is Apple’s apparent heir? Who else is fighting for the top job? That is after the break.
Gura: Before becoming CEO of Apple, Tim Cook served as Steve Jobs’ chief operational officer.
When it comes to who will replace Cook, his current COO might easily be the next in line.
Cook: And to update us on some work in this area, I’d like to bring Jeff Williams. Jeff?
Gura: Cook introduced Jeff Williams during a product launch in 2016:
Williams: Last year, we introduced the Research Kit. And our goal was to use technology to solve some of the major difficulties.
Gura: Williams has been the Chief Operating Officer for nearly a decade. He joined the organization in 1998.
Gurman: He currently oversees all aspects of Apple’s operations. He is in charge of the Apple supply chain.
He’s in charge of Apple’s healthcare initiatives. He is in charge of Apple Watch hardware and software engineering. He was in charge of the AppleCar. He is associated with the Apple Vision Pro headset and is in charge of Apple’s hardware and software design teams. So he already has a lot in his portfolio, and he’d be a good fit for Cook if something happened.
Many people have referred to him as Tim Cook’s Tim Cook.
Gura: And, like Cook, Williams grew up in the South, earned an MBA from Duke, and worked at IBM before joining Apple.
But these two have something more in common. They’re both in their early 60s.
Gurman: He is only two years younger than Cook.
Gura: This could hinder William’s road to succeeding Cook.
Gurman: If Cook departs in three to five years, you cannot appoint 66-year-old Jeff Williams as CEO of Apple. Right? That idea is unlikely to appeal to the street, the market, the employees, or the board of directors. You cannot set up someone for a two- to five-year stay as a new CEO.
Gura: This isn’t only an issue for Williams.
When you look through the other probable possibilities among Apple’s top management, you’ll notice a pattern.
Mark explains that many members of the company’s senior team are approaching retirement age.
Executive turnover is quite unusual.
Gurman: When you’re a senior vice president at Apple, you’re basically the CEO of a significant division, correct? You work at one of the world’s most successful firms. You also earn $25 million per year as an Apple senior vice president. So, financially, it’s well worth staying. But I believe the people on Apple’s management team are motivated by more than money.
Gura: Mark believes that if it isn’t Williams, there are a few other contenders who are likely to run.
They’re all currently on Apple’s payroll. Tim Cook himself has stated that he hopes the board selects someone from within the company. They each have their own set of trade-offs.
Finding a single person capable of performing all of the duties of an Apple CEO is a tremendous challenge.
One prospective contender is in his second term at Apple:
Gurman: Craig Federighi is in charge of software engineering.
Gura: But what does Mark say?
Gurman: Federighi undoubtedly lacks the business ability to lead the entire organization.
Gura: There’s also Deirdre O’Brien, who manages Apple’s global retail division.
Gurman: And prior to that, she was one of the company’s top executives in operations and sales.
Gura: But, according to Mark,?
Gurman: Apple is definitely looking to try something new for a new period rather than hiring another operations or HR specialist.
Gura: However, Mark has identified another contender. Who, given his age and experience, is a solid candidate?
Gurman: Everything I’ve discovered while covering the story points to a guy named John Ternus.
He is not even fifty years old. He is Apple’s Senior Vice President of Hardware Engineering.
He joined Apple’s executive team in 2021. He has quickly moved up the ranks. He formerly served as a vice president in charge of Mac computer engineering. He eventually added the iPad and AirPods. More recently, he included the iPhone and Apple Watch. And now he’s in charge of almost all of Apple’s revenue-generating products.
And he’s become an increasingly influential figure in the firm. He’s becoming more prominent in their marketing. He is working with authorities regarding the right to repair laws. As a result, he’s playing an increasingly important role in the Apple tale.
Gura: Mark believes Ternus played a key role this year at the annual executive conference in Northern California.
And just this week, Apple announced new technology, and Cook asked Ternus to explain the new goods to the world.
Timothy Cook: Here’s John with further information.
John Ternus: Let’s start with the iPad Air.
Gura: Mark believes Ternus’ chances of becoming Apple’s future CEO improve the longer Cook is around.
There is no hint that he intends to retire anytime soon.
Executives are no longer under as much pressure to retire in their mid-60s.
Gura: Mark, I was wondering if you could place this talk within the context of the larger cultural shifts we are witnessing. Bob Iger is back at Disney in his seventies. That must have liberated Tim Cook to consider a longer term at Apple.
Gurman: Yes, that’s an excellent point. Certainly, the next US president will be in their 80s throughout their term. You have Pat Gelsinger, Intel’s CEO. He was appointed to that position three years ago, when he was around sixty. So you do have some older statesmen there with Tim Cook, you know, one of the older ones, and Apple values, as some people tell me, individuals with gray hair because it shows they have experience and wisdom, and they’ve been around the block a couple of times. Tim Cook has seen everything, and his insight is invaluable as an Apple boss.
Gura: Cook, on his part, is currently attending to a lot of unfinished business.
Apple’s sales have slowed, the business is facing regulatory scrutiny in the United States and the European Union, and after its foray into automotive manufacturing came to a standstill, it is under pressure to create something new.
All of that and more is on Cook’s plate, yet Mark claims no one is pressuring him to stand down.
Gurman: There is no obligatory retirement age. And I would say that even if there was, they’d pull it up, shred it, or set it on fire so Cook could stay as long as he wanted. Wall Street loves him because he has been effective.
And so, I believe Tim Cook will be the CEO of Apple for as long as he wants to be, and he will not step down any sooner.
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