Apple has named John Ternus as its new chief executive to take over from Tim Cook, who is stepping down after 15 years of leading the technology major. Cook has been at the helm since 2011 after co-founder Steve Jobs resigned for health reasons, just before his passing. Ternus, who is currently the head of hardware engineering, will take over on September 1.There are clearly a lot of things going for Ternus. He’s been at Apple for a quarter of a century, and so is a perennial insider of sorts and has been widely acknowledged as the company’s “nice guy” CEO heir apparent for a while. So, the transition is likely to be as smooth as it gets.During his 25 years at Apple, Ternus has worked on every big product launch: most generations of the iPad and iPhone, as well as the Apple Watch and the AirPods. He’s also worked on the transition to Apple’s own chips. In a statement on Monday, Ternus referred to Cook as his “mentor.” Cook will stay on to work with Ternus on the transition, after which he will “assist with certain aspects of the company, including engaging with policymakers around the world” in his new role as executive chairman.But there are some headwinds. Ternus would take over from Cook after a spate of top-level departures at Apple. In fact, Ternus emerged as the favourite for the corner office after chief operating officer Jeff Williams, another long-time Apple executive, left the company last year. The company’s CFO and general counsel opted for smaller roles at Apple before their retirement last year. And Bloomberg reported that in a single week in December, Apple’s heads of AI, user interfaces and environmental initiatives announced their departures.Other challenges include a diversified supply chain that’s threatened by geopolitical tensions and surging prices for memory chips due to the continuing high demand from the AI buildout in the US.But for Ternus, the most challenging aspect would be pivoting the company deeper into AI, where it is seen as lagging many of its ‘Magnificent Seven’ peers that include Microsoft, Google, Meta and Amazon.Also Read | What is Claude Mythos, and why is Anthropic limiting its rollout?In October last year, when Apple announced iOS 26, the biggest redesign of its software backend in years, it was then seen as an attempt to belatedly stumble out of the starting blocks in Big Tech’s decisive race to leverage the promise of AI. The big question facing Ternus is whether Apple would redeem itself in the software and AI sweepstakes. The promise of a smarter and more versatile version of its virtual assistant, Siri, for instance, remains just that – a promise. Incremental steps notwithstanding, analysts point to the potential mistake of Apple persisting with attempts to basically build on Siri, rather than starting from scratch, similar to some of the other AI companies.Story continues below this adIn 2023, Apple unveiled a mixed-reality headset that has been little more than a niche product, and the 2024 edition of its annual Worldwide Developers Conference (WWDC) – a pre-summer rite that draws developers in droves to Apple’s Cupertino headquarters – heralded its first major foray into the AI space with a range of new software features accompanied by the promise of a more versatile and smarter version of Siri. This was all part of what the company called Apple Intelligence. Apple’s stock surged by more than $200 billion the following day, one of the biggest single-day gains of any company in American history.But then the showing at WWDC 2025 was underwhelming given the build-up, renewing analyst calls that it might have been better served to start over rather than merely attempt to improve Siri. One way to do that could be to invest in companies such as Perplexity, like Microsoft had early on and is now reaping the benefits of ChatGPT-driven Copilot being integrated into Microsoft systems. Apple Intelligence is, for instance, not a patch on other voice-activated AI assistance bots such as Google’s Gemini.Despite being one of the early movers into the backend chip design business, and its vast resources to spend on R&D, Apple is seen as lagging behind in the software pivot. Comparisons are being drawn to Finnish telecoms major Nokia, a market leader in mobile handsets that Apple itself had disrupted in the mid-2000s.New opportunity in wearablesTo be fair, Apple has acknowledged that its hardware bestseller, the smartphone, could be a thing of the past in less than a decade. And even as Apple’s rivals have been faster off the block to explore new use cases, with both Google and Meta betting on AI-infused smart glasses, alongside Chinese competitors including Xiaomi and Baidu. OpenAI, the developer of ChatGPT in which Microsoft has a stake, has meanwhile announced a software-to-hardware pivot, after announcing a $6.4 billion deal last year to buy a firm created by Jony Ive, Apple’s former chief designer for more than 25 years, to build an AI device.Story continues below this adAlso in Explained | Why OpenAI is shutting down its viral AI video app SoraWhile Apple has a product of the future in its Vision Pro headset, it is still a big, clunky device compared to the new Meta glasses. And now with Jony Ive working with OpenAI in a collaboration that could include wearables, Apple could have another big problem on its hands.Leveraging dataAt the same time, though, Apple still has a billion phones out there, and most of the world’s premium users to boot. But there again, Apple’s unwillingness to hoover up customers’ individual information, however creditable that might be from a privacy point of view, makes it harder for the company to train personalised AI models. As part of its ‘differential privacy’ policy, Apple uses collective insights, rather than the granular data scraped up by companies such as Google. Also, according to The Economist, privacy has encouraged Apple to prioritise AI that runs on its own devices, rather than investing in cloud infrastructure, even as chatbots have advanced more rapidly in the cloud because the models can be much bigger in scale. The result being that Apple has had to offer some users of Apple Intelligence an opt-in to ChatGPT – clearly a compromise of sorts.Apple’s struggle on the AI front is also being compared to its other previous shortcomings: the Apple TV project and the Apple car, both of which never materialised despite years of backend work. Chinese competitors such as Xiaomi have clearly trumped Apple in the electronics-to-cars diversification plans.What is clear is that when Ternus starts his innings at the helm in a little over four months, the pivot to the AI transition would likely be the most important mandate for Apple’s hardware boss.