Speaker 1: Bloomberg Audio Studios, podcasts, radio news. It was big news
Speaker 1: all over the world. Apple is getting a new CEO
Speaker 1: in fine John Turners. The current chief executive, Tim Cook,
Speaker 1: will step aside in September, and longtime Apple executive John
Speaker 1: Turnas will succeed him. Cook is sticking around. He'll become
Speaker 1: Apple's executive chairman because, as he told ABC's Good Morning America,
Speaker 1: I can't imagine life without Apple. During Cook's tenure, Apple's
Speaker 1: market value sword by more than three point six trillion dollars.
Speaker 1: It sold its billionth iPhone, reached five hundred and forty
Speaker 1: stores worldwide, and it's celebrated as fiftieth anniversary. Those are
Speaker 1: big milestone sure.
Speaker 2: But what we haven't seen are real breakthrough new types
Speaker 2: of products under Cook.
Speaker 1: That's Bloomberg's Mark German, who's covered Apple for years.
Speaker 2: I think there was a recognition that Apple is at
Speaker 2: an inflection point in its history where you're seeing Open Ai,
Speaker 2: Meta and other companies cropping up with new types of devices.
Speaker 1: And Mark says the careful CEO succession plan is an
Speaker 1: indication Apple sees just how much is at stake.
Speaker 2: You know, when Steve Jobs picked Tim Cook, the idea
Speaker 2: was that they had this product roadmap. They needed someone
Speaker 2: to execute the ideas broad and manufacturing, bring the iPhone
Speaker 2: into China, release new types of variations of existing products.
Speaker 2: What they need now is someone who can lead Apple
Speaker 2: into a new era with entirely new types of products.
Speaker 2: And so they're betting on who else but their hardware
Speaker 2: engineering person, the youngest person on the executive team, to
Speaker 2: take the company into the new era. Tim Cook is
Speaker 2: always going to do what's best for Apple, and really
Speaker 2: what's best for Apple at this point is for Tim
Speaker 2: Cook to no longer be CEO. So I think Tim
Speaker 2: Cook is doing right by Apple by passing off the baton.
Speaker 1: Right now, I'm David Gura, and this is the big
Speaker 1: take from Bloomberg News today. On the show A New
Speaker 1: Era for Apple, Mark walk us through John Turner's resume
Speaker 1: at Apple.
Speaker 2: He worked on their product design team. He worked on
Speaker 2: cinema displays early on. Then he worked on a bunch
Speaker 2: of max He worked on the IMACG five, he worked
Speaker 2: on some Mac notebooks and what have you, and then
Speaker 2: he was selected to be part of the leadership building
Speaker 2: the original iPad. And what turn has made his name
Speaker 2: on was product durability. If you ever held the original iPad,
Speaker 2: I think the thing that people remember was how durable
Speaker 2: it felt, how good it felt in the hand, and
Speaker 2: it felt like this strong piece of equipment.
Speaker 1: Or the original iPad. Turnis was put in charge of
Speaker 1: development for the Mac and spearheaded the creation of AirPods.
Speaker 1: He would seeing that someone who had a real gift
Speaker 1: for coming up with new products and product designs for Apple.
Speaker 2: And then his final test was actually at the turn
Speaker 2: of the decade, going into twenty twenty, Tan Riccio, his
Speaker 2: boss at the time, he ran harder engineering. He shifted
Speaker 2: engineering of the iPhone to Turnis. Could he bring a
Speaker 2: major new iPhone to market? And very successfully They were
Speaker 2: able to bring the iPhone twelve that was at at
Speaker 2: the height of COVID and only launched at about a
Speaker 2: month a month and a half later than their usual patence.
Speaker 2: What Turners was able to bring to market was a
Speaker 2: major new redesigned iPhone, the first iPhones with five G,
Speaker 2: which kickstarted a new supercycle of launches for the company.
Speaker 1: Mark says it was that success during the pandemic that
Speaker 1: set up Turners to succeed Tim Cook.
Speaker 2: Twenty twenty one turnas officially becomes head of hardware Engineering
Speaker 2: for Apple and served on Tim Cook's executive team for
Speaker 2: the last five six years in that position.
Speaker 1: What do we know about who actually picked Turn? Is
Speaker 1: this the board's decision?
Speaker 2: Tim Cook, he made this election. He made the choice.
Speaker 2: And my strong belief is that Eddieq, the head of
Speaker 2: Services at Apple, who had worked very closely under Steve Jobs,
Speaker 2: was Tim Cook's perhaps chief advisor on this election here.
Speaker 2: Apple doesn't do CEO transitions too often, and it's fair
Speaker 2: to say this is the first sort of well executed
Speaker 2: CEO transition in Apple's history. Obviously, the Tim Cook era
Speaker 2: began because Steve Jobs, the company co founder, was about
Speaker 2: to pass away, and that was very sad, and Cook
Speaker 2: was pushed into this role. But now we're getting a
Speaker 2: formal transition here where a successor is being handpicked and
Speaker 2: is going to ease into the role over the next
Speaker 2: three to six months or so. And so I would
Speaker 2: say this was a choice made between Tim Cook, Eddieq,
Speaker 2: and Apple's board of direct But ultimately Apple's board is
Speaker 2: going to go with what Tim says. He's now the
Speaker 2: exec chairman, and they voted unanimously to select John Turnis
Speaker 2: as the CEO.
Speaker 1: What is that background, that emphasis on hardware say about
Speaker 1: the way he's likely to approach the big job at Apple.
Speaker 2: The role that Apple CEO is to take what they're
Speaker 2: best at and apply that knowledge to those specific areas
Speaker 2: at the company. When you're the CEO of such a
Speaker 2: gigantic company, and Tim Cook he has about twenty direct reports.
Speaker 2: The way Apple's organized is that all the major functions
Speaker 2: report up to the CEO directly, and so you have
Speaker 2: to pick your spots. You can't really get your hands
Speaker 2: dirty with every function. Tim Cook a finance guy, a
Speaker 2: sales guy, an operations guy, so he put his fingers
Speaker 2: and all that and had been deeply involved in the operations,
Speaker 2: the supply chain, the manufacturing of the company. What you're
Speaker 2: going to see with Turnus is he is going to
Speaker 2: leave the operational stuff, manufacturing, supply chain, you name it
Speaker 2: to the other leaders at Apple who are in charge
Speaker 2: of those functions. They have a new COO, they have
Speaker 2: a new CFO, so they have a new procurement person,
Speaker 2: they have a salesperson who's been elevated in the company
Speaker 2: in recent years. But you're going to see him apply
Speaker 2: his attention to the product design teams, the hardware engineering teams,
Speaker 2: the silicon teams, probably the software teams, and really get
Speaker 2: knee deep in the product development side of things. And
Speaker 2: I also expect him to have a very strong influence
Speaker 2: and involvement on Apple's AI work, not only in how
Speaker 2: the company is run, but AI products as well.
Speaker 1: Ahead of the CEO announcement, Mark notis Turnus got a
Speaker 1: marquee role at a major Apple event last month.
Speaker 2: We're so excited to have you go out here so
Speaker 2: you can get your hands on all living price screen
Speaker 2: announces this week. He kicked off the event, which was
Speaker 2: usually what Tim Cook did.
Speaker 1: And it's not just a big deal that he, rather
Speaker 1: than other Apple executives, took center stage, but it was
Speaker 1: the kind of product that he rolled out next, one that,
Speaker 1: according to Mark, has the potential to this rep the
Speaker 1: lower end of the laptop market, totally.
Speaker 2: New from the ground, a new system to do just that.
Speaker 1: And we call it MacBook VU, the MacBook Neo, an
Speaker 1: Apple laptop for five hundred and ninety nine dollars, almost
Speaker 1: half as much as the MacBook Air.
Speaker 2: Turnus's big push with the MacBook Neo was this idea
Speaker 2: that they need something fun, cheap and cool for students,
Speaker 2: for kids, for people who don't want to spend you know,
Speaker 2: eleven hundred dollars plus a on a Mac computer. In
Speaker 2: order to bring more people into the Apple ecosystem, the
Speaker 2: thought is, if you get a MacBook Neo at an
Speaker 2: early age, you'll become an Apple customer for life. Get
Speaker 2: the phone, get the iPad, get the AirPods, get the watch,
Speaker 2: you name it. They needed some sort of gateway entry
Speaker 2: level product into the Apple ecosystem, and they knew that
Speaker 2: for students an iPad in many cases wasn't going to
Speaker 2: cut it because the effectiveness of a Mac is so
Speaker 2: much better. For years, Apple's marketing people they really pushed
Speaker 2: back against the idea of what they called chasing market
Speaker 2: share with cheaper products, and so turnis really pushed for this,
Speaker 2: and as Eddie q, Apple Services chief said in a
Speaker 2: town hall meeting with employees after the CEO introduction, he said,
Speaker 2: it's the hottest product in the world right now. But
Speaker 2: it is indicative of turnis being able to fight for something,
Speaker 2: push through something, and make a meaningful change when it
Speaker 2: comes to a product at the company. The truth of
Speaker 2: the matter is is that they've been preparing for twenty
Speaker 2: twenty seven twenty twenty eight to be this big product moment.
Speaker 2: For the last several years, Turnis is externally not talking
Speaker 2: about the plan, but I can tell you that Turnis
Speaker 2: has been leading the charge on six major new products
Speaker 2: that are all new product categories for Apple.
Speaker 1: Compared to these six products planned for the next two
Speaker 1: years under Turnis, Mark says Apple only launched three new
Speaker 1: product categories during Cooks fifteen years as CEO. So what
Speaker 1: are these six products have in common? AI AI AI AIAIAI.
Speaker 2: So the first one we'll see is a product that
Speaker 2: is a smart display. This is a home pod with
Speaker 2: a screen. It's a mini sized iPad that you can
Speaker 2: put on your wall or put on a speaker base.
Speaker 2: Then it has facial recognition. It could play nicely with
Speaker 2: the new SERI and be a home hub command center
Speaker 2: for everything you want to do in your home. The
Speaker 2: second product is a tabletop robot. It's that same device
Speaker 2: I just explained, but with a robotic arm. So you
Speaker 2: put on your desk, your kitchen counter, and then that
Speaker 2: display can move around in air in space with a
Speaker 2: robotic actuator, sort of like an artificial limb. And then
Speaker 2: the third product is going to be a privacy focused
Speaker 2: security camera and home security system.
Speaker 1: The other three products are going to be AI wearables.
Speaker 2: You're going to see new AI AirPods with AI features.
Speaker 2: You're going to see smart glasses, and you're going to
Speaker 2: see a pendant. They have computer vision cameras so they
Speaker 2: can feed data into the Apple Cloud and into your
Speaker 2: iPhone with AI processing to do things like visual reminders
Speaker 2: or visual turn by turned directions. You could wearing the
Speaker 2: air pods or the smart glasses, and when you're walking
Speaker 2: down the street with maps going and instead of it
Speaker 2: telling you turn right in one thousand feet, it'll say
Speaker 2: turn right by the gray building with a bunch of
Speaker 2: windows on the outside.
Speaker 1: Marx's Apple also has plans for new features and updates
Speaker 1: in existing product categories, like a new twentieth anniversary iPhone
Speaker 1: with curved glass and touchscreen MacBooks. Assuming all goes to plan,
Speaker 1: but of all the potential products that Mark is anticipating,
Speaker 1: the incoming CEO to release first.
Speaker 2: John Turnis is going to become CEO the first week
Speaker 2: of September, and then a week later he is going
Speaker 2: to introduce the biggest new Apple product in several years
Speaker 2: the foldable iPhone.
Speaker 1: Why is a foldable iPhone such a big deal?
Speaker 2: First of all, I think FULLI ofble iPhone is freaking
Speaker 2: cool me personally, and I can't wait. And it's a
Speaker 2: game changer, you know. The big difference with this foldable
Speaker 2: phone is that Apple has really upped the quality in
Speaker 2: three key ways. One is durability. Foldable phones are known
Speaker 2: for being really flimsy and breaking easily. And turnus is
Speaker 2: non for someone that wants to apply very high product
Speaker 2: quality reliability so people can get really long term use
Speaker 2: out of these things. But it's really an engineering marvel,
Speaker 2: technical marvel, and they're going to get into the nitty
Speaker 2: gritty about why this is so complex, And like the
Speaker 2: new CEO is the guy who spearheaded it. Not everyone's
Speaker 2: going to want to buy it or be able to
Speaker 2: afford it, but I'll be first in line.
Speaker 1: Up. Next, what does the leadership change at Apple mean
Speaker 1: for the company's relationship with President Trump? Tim Cook, who
Speaker 1: has been the CEO of Apple for fifteen years and
Speaker 1: has worked at the company for twenty eight years, is
Speaker 1: staying on as Apple's executive chairman. I asked Bloomberg's Mark German.
Speaker 1: How Cook is going to approach that new role.
Speaker 2: What he said is there's one CEO at a time.
Speaker 2: He's not getting in the way of Turnus. He said,
Speaker 2: he is going to be there for whatever he's called
Speaker 2: upon by Turnis and to serve as a sounding board
Speaker 2: as an advisor to him. The other thing he said
Speaker 2: is that he'll be very focused on policy reading between
Speaker 2: the lines. He's very focused on the next three years
Speaker 2: of Donald Trump's term, dealing with him, Very focused on
Speaker 2: dealing with China, very focused on world stage related matters.
Speaker 1: How were you thinking about Tim Cook's legacy as CEO
Speaker 1: amidst all this.
Speaker 2: Tim Cook's legacy is that he took over for a
Speaker 2: generational once in a lifetime technology company co founder and leader.
Speaker 2: And when he took over for Steve Jobs, I mean,
Speaker 2: if you remember, it was pretty tumultuous and uncertain of
Speaker 2: the time. You know, things could have gone either way.
Speaker 2: But he kept that ship steady. He executed the vision
Speaker 2: of Steve Jobs. He brought new products to market, and
Speaker 2: he squeezed so much lemonade out of the lemons that
Speaker 2: was Apple at the time, to make variations of products,
Speaker 2: growing the financials of the company, to such an incredible
Speaker 2: mind boggling I melting degree, taking Apple into services really
Speaker 2: in a big way for the first time, Apple TV,
Speaker 2: Apple Music, health products, financial services. The other thing he
Speaker 2: did was that China Mobile deals, getting the iPhone into
Speaker 2: China in a big way in the early twenty tens.
Speaker 2: So his legacy is nothing short of incredible. I think
Speaker 2: it could have been even better if there were a
Speaker 2: few product related things that worked out. He's leaving Apple
Speaker 2: with an AI legacy so far that is negligible and
Speaker 2: very unfortunate for them. The other thing was a mishandling
Speaker 2: of the self driving car project, where Apple spent a
Speaker 2: decade and tens of billions of dollars working on that
Speaker 2: self driving car. Obviously, the hard calls to cancel that
Speaker 2: project were made, but quite frankly, with Apple's resources and
Speaker 2: ideas and manufacturing capabilities, they should have been able to
Speaker 2: bring something to market and they simply didn't.
Speaker 1: I think about the challenges this company faces, and you've
Speaker 1: alluded to a few of them, certainly lagging in the
Speaker 1: AI race. You've written about this exodus of top talent
Speaker 1: from Apple to competitors and other companies, particularly in the
Speaker 1: AI space. How well equipped is John Turnis to write
Speaker 1: the ship when it comes to those issues and others.
Speaker 2: I think Turnis is definitely equipped. I think that one
Speaker 2: of the biggest issues Apples facing right now are some
Speaker 2: of these AI companies wanting to build hardware basically pillaging
Speaker 2: the hardware ranks of Apple. And I think putting a
Speaker 2: hardware engineering person at the top of Apple, who's going
Speaker 2: to leave Apple right now? In the middle of this
Speaker 2: from your hardware engineering standpoint, when now you have heard
Speaker 2: engineering running the company versus sort of what people have
Speaker 2: called the being encounters.
Speaker 1: Tim Cook has been the job for fifteen years. Let's
Speaker 1: assume that John Turners has a similar tenure fifteen year tenure.
Speaker 2: Well, if he doesn't, then this was all a failure.
Speaker 2: The whole idea was that Turnis could walk in for
Speaker 2: fifteen years.
Speaker 1: Played out for me, what does this company look like
Speaker 1: fifteen years from now if John Turners has a successful
Speaker 1: run at CEO.
Speaker 2: Well, fifteen years from now, if he had a successful
Speaker 2: run as CEO, they would invent new types of product
Speaker 2: categories that we haven't seen from other companies. Maybe he
Speaker 2: brings the car project or some sort of mobility project
Speaker 2: back to fruition. Maybe he's able to get Apple into
Speaker 2: the humanoid space, helping lead the charge to move away
Speaker 2: from manufacturing all their silicon essentially in Taiwan and move
Speaker 2: it to the US and elsewhere at a faster pace.
Speaker 2: You know, at least doubling or tripling the size of
Speaker 2: the Apple ecosystem and the user base, just like Tim
Speaker 2: Cook was able to do. Make this a perhaps if
Speaker 2: you look at inflation and everything like, this should be
Speaker 2: a ten trillion dollar company by the time you know
Speaker 2: all I said and done. But most of all, most
Speaker 2: important thing is retaining the Apple brand, keeping and growing.
Speaker 2: Apple is the strongest technology brand in America and not
Speaker 2: losing steam to newcomers like open ai and Meta.
Speaker 1: This is the big take from Bloomberg News. I'm David Gura.
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