The recent departure of its head of AI, the upcoming retirement of the long-time chief operating officer, and a fight with the EU over its app store are just the latest developments in what’s been a truly rough period for Apple.
COO Jeff Williams (62), who is Apple’s second-highest executive after CEO Tim Cook (64), will retire at the end of this month, Bloomberg reports. He will be replaced by Sabih Khan, who has been at Apple for 30 years and has been a senior vice president since 2019.
“When Khan steps into the new role, he’ll contend with challenges ranging from tariff costs to slowing iPhone growth,” wrote Bloomberg. “Apple also is grappling with global regulatory scrutiny and has fallen behind in artificial intelligence. New AI-focused startups are working on hardware products that could displace the company’s iPhone, iPad, Mac and other devices.”
He will also have to deal with the bigger, more direct challenges facing the iPhone-maker. These include Apple’s own AI efforts falling so far behind the rest of the industry that it is now toying with the idea of using other AI services to bolster what Siri can do. It already uses OpenAI and Google’s Gemini models for some things.
“It’s also wrestling with regulatory issues, including forced changes to its App Store in the EU and an ongoing US Department of Justice lawsuit that could upend a $20 billion-a-year deal with Google. That all comes as some of Apple’s hardware continues to age, and AI startups are looking to replace the iPhone with newer, voice-controlled products,” writes Bloomberg.
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Perhaps more concerning right now, given how Apple plans such successions, having indicated last year that Kahn would be Williams’ successor, are the implications of the AI team’s departures. Ruoming Pang, who is in charge of building Apple’s AI models, has reportedly been poached by Meta for a huge salary bump, with many other engineers from the Apple Foundation Models (AFM) division also leaving.
“To secure Pang, Meta offered a package worth tens of millions of dollars per year, the people said. Meta CEO Mark Zuckerberg has been on a hiring spree, bringing on major AI leaders including Scale AI’s Alexandr Wang, start-up founder Daniel Gross and former GitHub CEO Nat Friedman with high compensation,” Bloomberg said.
This is against the backdrop of a recent departure of intellectual talent from Apple, including much of the revered design team under Sir Jony Ive, mostly to his new ventures. This includes the startup io that was bought by OpenAI this year for $6.4-billion. This alone is considered to be a big threat to Apple, that the designer of its biggest hit product is now the chief designer of a new generation of AI-powered gadgets.
Meanwhile, Cook’s likely successor is John Ternus, Apple’s senior VP of hardware engineering, Bloomberg reported.
‘Clearly he wasn’t destined to be the Tim Cook replacement,” said Bob Mansfield, who was chief of hardware engineering under both Cook and co-founder Steve Jobs. “He’s about the same age as Tim, so that wouldn’t make much sense.”
