Apple (AAPL) announced that Tim Cook will step down as chief executive of the iPhone maker and become executive chairman, with hardware engineering veteran John Ternus set to succeed him as CEO.
Cook, who has served in the top role at the technology giant since 2011, will transition to executive chairman, effective Sept. 1, Apple said late Monday. Ternus, who currently works as the company's senior vice president of hardware engineering, will take over from Cook on the same date.
Arthur Levinson, who has been Apple's nonexecutive chairman for the past 15 years, will become its lead independent director at the beginning of September, according to the company.
"On behalf of the entire board of directors, we are incredibly grateful for (Cook's) countless contributions to Apple and the world, and we are thrilled he will now be executive chairman," Levinson said in a statement. "We believe John is the best possible leader to succeed Tim."
Ternus joined Apple's product design team in 2001 and became vice president of hardware engineering in 2013. He became part of the executive team in his current role in 2021.
"I am profoundly grateful for this opportunity to carry Apple's mission forward," according to Ternus. "I am filled with optimism about what we can achieve in the years to come."
In a separate statement, Apple said Johny Srouji, who most recently served as senior vice president of hardware technologies, will become chief hardware officer and take on an expanded role leading hardware engineering.
Apple's stock decreased 0.5% in Tuesday's most recent premarket activity. It has gained about 37% over the past 12 months.
Investors are likely to have a mixed view on Cook stepping down as CEO, with the company undergoing a major transition on its artificial intelligence strategy, Wedbush Securities said in a Monday client note. "While there were rumors of Cook leaving as CEO, investors will for now have more questions than answers around the timing and what this means for the broader Apple strategy," Wedbush analysts, including Daniel Ives, said.
The brokerage believes Ternus will face pressure to produce immediate success, especially on the AI front, with all eyes on Apple's product roadmap and AI strategy at the Worldwide Developers conference later this year. Wedbush maintained its outperform rating and $350 price target on Apple's stock.
In January, Apple reported fiscal first-quarter results above Wall Street's estimates on the back of strong iPhone demand. During a conference call with analysts at the time, Chief Financial Officer Kevan Parekh said the company expected overall revenue to grow by 13% to 16% on a yearly basis for the second quarter, reflecting its "best estimates of constrained iPhone supply."