John Ternus takes over as Apple CEO today, inheriting a set of challenges that echo the defining problems solved by Steve Jobs and Tim Cook in their respective eras: creating new products people love and then scaling their production worldwide with healthy margins.
The App Store’s walled garden is eroding
One of his immediate tasks will be defending the App Store, which for decades operated like a walled garden, effectively locking users into Apple’s smartphone ecosystem. Those walls are coming down as new development approaches and tools — notably OpenAI’s Codex and Anthropic’s Cowork — enable “vibe coding” and other ways to build apps that operate outside Apple’s tight control.
That shift means Apple can no longer rely on banning or tightly regulating those apps to preserve its ecosystem. The wave of externally enabled AI applications appears to represent the direction of the industry, forcing Apple to reconsider both policy and product strategy.
Hardware as the likely battleground
Apple’s best near-term option may be to refocus on the area where it has traditionally excelled: hardware. There is room in the market for a device that could define the AI era in the way the iPhone defined the mobile era, and Apple is well positioned to pursue such a product.
Tougher competition and slimmer margins ahead
But the competitive landscape will be tougher. Longtime Apple hardware designer Jony Ive is now working at OpenAI and could help build a compelling rival product. At the same time, as Tim Cook understands, profit margins for any new mass-market AI device are likely to be smaller than the highly profitable margins Apple achieved with the iPhone.
In short, John Ternus steps into the role facing technical, strategic and commercial pressures: protecting and adapting the App Store model while seeking hardware-led opportunities in an increasingly AI-driven market.
(Adapted from writing by Reed Albergotti.)
