Apple is entering a new phase.
After 15 years under Tim Cook, John Ternus has taken over as CEO with a very different challenge: make one of the world’s biggest companies move faster without losing what made it successful in the first place.
Ternus is already pushing for changes across product development, management, costs and revenue.
The bigger question for investors is whether this becomes a meaningful growth strategy or simply another round of cost cutting.
A new CEO, a new way of working
Ternus is only weeks into the job, but he is already looking at how Apple operates internally.
One of his priorities is to reduce the layers between engineers and senior leadership.
That could mean fewer middle-management roles, fewer organizational layers and more responsibility pushed directly toward engineering teams.
Ternus has reportedly argued for this philosophy for years.
His view is simple:
Apple should be able to accomplish more without constantly adding more employees.
That is a significant shift for a company of Apple’s size.
The goal is not just to make Apple smaller. It is to make Apple more productive and faster at turning ideas into products.
Apple wants to break away from the launch calendar
For years, Apple has followed a familiar rhythm.
Spring launches.
Fall launches.
Then repeat.
Ternus is considering a different approach.
Instead of concentrating major launches around a few predictable periods, Apple could introduce products more frequently throughout the year.
That could help Apple create more opportunities to:
- Sell new devices
- Drive upgrades
- Introduce new services
- Keep customers engaged with the ecosystem
- React faster to changing technology trends
But changing Apple’s development culture will not happen overnight.
The company has spent years building its product pipeline around carefully planned launch cycles. Moving toward a more continuous release model could take years.
The AI era is forcing Apple to move faster
This is perhaps the biggest reason behind the change.
Apple is competing in a technology environment where AI is developing extremely quickly.
Companies such as Meta and Google are moving aggressively, while Apple has faced criticism over the pace of its AI progress.
Ternus appears to believe that Apple needs to become more experimental and more willing to move quickly.
That does not necessarily mean Apple will suddenly release unfinished products.
Instead, the focus appears to be on shortening the distance between an idea and an actual product.
For investors, this matters because Apple’s future growth may depend on its ability to create new product categories, rather than relying almost entirely on the iPhone and existing services.
Apple is also cutting costs
The other side of becoming leaner is uncomfortable.
Apple has been carrying out layoffs and reducing teams across different parts of the company.
Engineering program managers have been among those affected, including some senior positions.
Apple has also made cuts involving:
- Siri
- Vision Pro
- AI-related software teams
- Gaming
- Fitness+
- Other projects that are considered less important to the bottom line
Some projects have also been scaled back or cancelled earlier in development.
This suggests Ternus is willing to make difficult decisions about where Apple spends its resources.
The message internally appears to be clear:
Not every project deserves more money and more people.
AI could also change Apple’s workforce
There is another major part of this transformation.
Apple is exploring how AI can take over some work currently performed by employees.
One example was AppleCare.
The company considered cutting around 5,000 customer-service positions as AI-powered phone and web agents could potentially handle parts of those responsibilities.
Those plans were eventually put on hold.
But the fact that Apple explored the idea shows where the company is heading.
AI is not only being treated as a product opportunity.
It is also being considered as a productivity tool inside Apple itself.
Apple needs new sources of revenue
This may be the most important issue for investors.
Apple’s services business has been one of its biggest growth engines for years.
Services include areas such as the App Store, subscriptions and other digital offerings connected to Apple’s ecosystem.
But growth is beginning to slow.
Services revenue still remains larger than it was a year earlier and hit a record for the June quarter. However, it declined sequentially for the first time since 2022.
That matters because services are strategically important.
They generate recurring revenue and help Apple make more money from customers long after they purchase an iPhone, iPad or Mac.
With services growth losing some momentum, Ternus and his leadership team are looking for new services and new ways to monetize Apple’s existing ecosystem.
More products could mean more opportunities
Apple already has an ambitious product pipeline.
Some of the products reportedly being prepared include:
- Camera-equipped AirPods
- Apple’s first smart glasses
- A redesigned iPhone tied to the iPhone’s 20th anniversary
- New products and updates across Apple’s existing ecosystem
This is where the new strategy could become interesting.
If Apple can launch products more frequently, it creates more chances to generate hardware revenue.
Those products can also feed into services.
A new device can bring more users into Apple’s ecosystem, which can create additional opportunities for subscriptions, apps and other services.
So the strategy is not simply about selling more gadgets.
It is about making the entire Apple ecosystem generate more revenue per customer.
But Apple is facing higher costs too
Apple is also dealing with a memory shortage that has pushed up component costs.
The company has raised prices in some areas to offset higher expenses, but it is also absorbing part of the additional cost to avoid making products dramatically more expensive for customers.
That creates another challenge for Ternus.
He needs to make Apple more efficient at the same time that some of its underlying costs are rising.
That makes the push for a leaner organization even more important.
What this means for Apple investors
The most interesting part of Ternus’ strategy is that he is attacking several problems at the same time.
Speed:
Apple wants to develop and launch products faster.
Efficiency:
The company wants fewer organizational layers and more output from existing teams.
Innovation:
Apple wants to experiment more aggressively, particularly as AI reshapes the technology industry.
Revenue:
Apple needs new products and services to offset slower growth in existing businesses.
Costs:
The company is looking for ways to operate more efficiently while dealing with higher component expenses.
These priorities are connected.
A faster Apple could launch more products.
More products could create more hardware sales.
More devices could bring more customers into Apple’s ecosystem.
And a larger ecosystem could create more opportunities for services revenue.
The big risk: can Apple move faster without losing its edge?
There is a reason Apple has historically moved carefully.
Its products are tightly integrated across hardware, software and services. That takes time.
Moving faster can create opportunities, but it can also increase the risk of mistakes.
Apple therefore has to find a difficult balance:
Move faster, but don’t sacrifice the quality and reliability customers expect.
That may be Ternus’ biggest test.
He is not taking over a struggling startup that needs to reinvent itself from scratch.
He is taking over one of the world’s most valuable and successful companies.
The challenge is figuring out what needs to change and what should be left alone.
What investors should watch next
The next few years could tell us whether Ternus’ approach works.
Keep an eye on:
- New product launches: Does Apple expand beyond its traditional release calendar?
- AI progress: Can Apple turn AI into a meaningful product advantage?
- Services growth: Can the company reignite momentum?
- Margins: Do cost cuts actually improve efficiency?
- New categories: Can products like smart glasses create another major growth engine?
- Employee productivity: Does a leaner organization actually deliver products faster?
- Capital allocation: Does Apple continue prioritizing buybacks while investing in new growth areas?
The bigger picture
Apple does not appear to be trying to become a completely different company.
Instead, Ternus seems focused on making Apple faster, less bureaucratic and more willing to experiment.
That could be exactly what Apple needs as the technology industry moves deeper into the AI era.
But the real test will not be the internal restructuring.
It will be what eventually reaches customers.
Can the new Apple build the next big thing before the market decides it has become too dependent on the iPhone?
That is the question investors should be watching.