Welcome to a live Vergecast, the flagship podcast of John Turnis, who we have to be nice to now because he's the new CEO of Apple.
It's been a day, my friend. How are you?
It has been a day, right at the end. We're emergency broadcasting.
So, the news obviously, Tim Cook stepping down as the CEO of Apple. John Turnis, the not quite new, soon to be CEO of Apple. Neil, I just we got a bunch of stuff to talk about, but I'm just curious immediate reaction. Are you surprised a that this happened and b that it happened today?
I am very surprised it happened today. Like very very surprised it happened today. Apple just turned 50. Tim Cook did a raft of interviews during that time in which he said he was not leaving anytime soon. So I'm
which is technically true. He's staying as the executive chairman. There's a quote that more or less makes it sound like Tim Cook's new job at Apple is to be the person who gets yelled at by politicians.
So he is not technically leaving. So I'm sure there will be people at Apple who will tell you he was not technically lying. And yet here we are.
Yeah. I mean the role of executive chairman guy who gets yelled at by Congress and by foreign governments is like a storied Silicon Valley role.
The immediate comparison I would make is to Eric Schmidt who was the CEO of Google. He was the adult supervision for Larry Page and Sergey Brin. Larry Page became the CEO. Eric kicked himself upstairs to do politics and in particular like run around and get yelled at by Europeans. So, this is a pretty standard arrangement.
Again, it's just the timing that really gets me because it's a sort of out of nowhere on a Monday evening. It's not like a Friday news dump. There was no rumble that it was going to happen. And I in particular was expecting it to happen around the iPhone.
Right. I assumed that we would get a John Turnis iPhone introduction and then a one more thing. Our hottest new product is John Turnis. I could I had that staging in my mind. I wasn't expecting a sort of bomb to go off right after Apple 50. But again, the news is not surprising. I think we all knew it was going to be John Turnis. You and I have interacted with John Turnis many times over the past several years. He's always been very kind. He's in it. Like he is a hardware person. He will argue with you about USB-C. So I'm excited for that turn for Apple in that specific way. And I'm not at all surprised that Tim Cook is going to stick around and manage China and manage Donald Trump. Like that is a totally different set of skills.
Yeah. Yeah. So is that is that your read of the breakdown? So basically John Tarnis who was the SVP of hardware engineering is becoming CEO. Johnny Shuji who has been an interesting figure inside of Apple. There were rumors not that long ago that he was leaving. There's been this kind of executive parade out of Apple over the last 12 months. Some people saying essentially this is great news. Thank god they're gone like Alan Dy who was doing design and a lot of people thought not very well and then there have been a bunch of people who have left that that were bigger losses. Johnny there were there were rumors he was going to leave he he quashed those pretty aggressively is now getting John Turnis' old job but then a little more. His new title is chief hardware officer. And I believe you're the you're the titles expert on the Vergecast, but I believe Apple is one of those companies that is very deliberate about titles. And so the idea that it's giving Johnny a suite title is a big deal. So this is like this is two hardware people being elevated to very important new positions inside of Apple. Should we take that as the sort of obvious sign that it feels like it wants to be that this is a company like doubling down on its hardware business?
Apple's always been a hardware business. It's pretty hard to get Apple software without Apple hardware. Except in the case of Apple TV, which is both a gadget, a service, a piece of software,
Who knows what is going on there? That's the only truly horizontal piece of software they have that is people talk about. Apple Music is another one.
but that's about it really. I think Johnny Shuy is a really important Apple. There are a lot of people who thought that Intel would poach him. There are big jobs he could take that he is more than qualified for. I think Apple needs to keep him and I you know the future of their products is so intimately tied to their chip roadmap that elevating the person who has led all the chip designs into the role of chief hardware officer. It makes a natural kind of sense. What we don't know is whether Sergey is any good at actually making hardware. He's great at making chips.
He is very good at making chips. There's lots of other bits and bobs that go into a great piece of hardware. That said, John Turner is still going to be there. His background is hardware. You expect him to pay some attention to that as well. On the title front,
Apple has usually like historically been really tight with titles. You can get up to SVP and that's that's where you live.
And famously, Steve Jobs used to tell people that once they had an SVP title, they had no more problems. Like their problems were their own. In the Tim Cook era, that has totally been changed. Like everybody has had fake titles forever in the Tim Cook era. That's how he has managed his team. Like you're getting poached. Here's a chief nothing title. Like Johnny Iva had the chief design officer title. It literally meant that he was retired.
So it's unclear what this actually means in the day-to-day. But given their emphasis on owning the the whole widget from chips to software to distribution to market, like you can see that this probably feels like more of a real title than not.
Yeah, I think that's right. I mean, and I think I I've been looking around seeing just sort of the immediate reactions. I went to CNBC where they started talking about the stock price and all the stuff this is going to mean. And there is there's this swirl of stuff going on inside of Apple that I think is really complicated to pull apart and is going to be really interesting to see how it changes or doesn't with a new CEO. So there's Apple the hardware company, right, which it it fundamentally is. Apple is the iPhone company more than anything else, but it also has these other giant hardware businesses. It sells a lot of hardware. It sells at huge margins. It has done so for a very long time. Apple is also increasingly a services business. And this is the the bit of CNBC. I'm a financial genius now because I watched eight minutes of CNBC while I was getting ready for this. The Apple wants to be perceived as a software company making software margins which is one of the reasons it has been pushing harder and harder into services. It is it has fought tooth and nail to continue to extract its 30% from everything that happens on the iPhone. There's a sense that okay even if the growth of our hardware business is going to stall, we're going to find more and more ways to make money from people. Then there is this mess that is AI and Apple intelligence and Siri which Apple has largely whiffed on but I think in a funny way has sort of come around on Apple where like actually being the company competing to make the frontier model that causes the most problems is not a great place to be and instead being the hardware on which everyone will do these things and thus you can extract your 30% rent becomes very important. So, like there's there's all this stuff just swirling around. And I feel like one easy read of this would be to say that, okay, Apple has seen all of this. And even if you think AI is the future, Apple's big bet is that being the hardware maker of the AI revolution is going to be vastly more important than like trying to go poach Demisabas from Google to come run your company and be an AI company forever.
Did I just twist myself into knots or does that make any sense?
You you're you're a little bit twisted, but let me help you untwist it.
The Tim Cook era is defined by Apple squeezing every dollar from every part of its business that it can.
Boy, has Tim Cook been good at that.
And I'm not even saying the products are good or bad. I'm just saying it definitionally the thing that Cook has done is say, well, we've run out of countries to sell iPhones in. And you know, even if we spend all of our effort getting 10% more users to switch from Android, that won't move the needle because we're already so big. So what we're going to do is make all the app subscription apps and make all of our money every time you push a button on the iPhone. And we're going to fight tooth and nail with Epic Games about Fortnite in app purchases, whatever it is. That has worked. On the other side, every product line at Apple has now sprouted into 10,000 configurations. Every I I can't tell you what an iPad is. There there's so many of them that it like boggles the mind.
And you know, the iPhone is now 50 different iPhones. Oddly, the Mac has gotten more constrained. You know, you get the feeling Tim Cook doesn't pay as much attention to that, but like every other product at Apple, it's just like so many configurations at so many price points. Every price point from zero to $10 million, there's an Apple product for you. And there have been rumors recently about Apple both pushing further down into cheaper prices and higher into luxury prices. Like this is a company that would like to sell you every imaginable thing at every imaginable price.
And there's there's the thing that Tim Cook is probably best known for which is the like unbelievable supply chain work that he's done over 15 years, right? Like you talk about squeezing dollars. No one in this business is better at that than Tim Cook. And so it's like I I think he has found a way to squeeze every dollar out of the company and every one of its products in every way is like a perfect summation of Tim's of Tim's legacy. And you either like that or hate it, but it is it is boy has it been good for business.
It is impo it is impossible to understate how hard that is.
Very few companies or people can pull off the just the one product. We're going to make a new iPhone every year at iPhone scale and they do it every year without missing a beat. That is one of the most impressive feats in business history and manufacturing history and anything history. Like there are armies that don't operate as with as clean logistics as Apple operates the iPhone supply chain.
that's remarkable. Here's my big criticism of the Tim Cook era.
They don't make enough stuff. They they like simply do not have enough products. They're not taking enough shots. And when they do take the shots, they put too much pressure on them in like weird ways. The example I always go back to just I think it's funny is the introduction of the Apple Watch where they just like overloaded the Apple Watch with expectations and hype and Bono was there and we all had to pretend the digital crown was an input method. I knew you were going to say it's like it's just like it's so funny to me like crown was going to be as big as the touchscreen. That's like a real thing that they said. They made that case and it's like guys, you don't have to you can just back you could just have more products. You could just try more things and see what works. The the Vision Pro is the same way. They just like overloaded this VR headset with all of these expectations because they weren't trying enough things, right? Because there the Tim Cook era is so much about optimizing the things that already exist. And certainly there are products during his tenure that are very important like AirPods are very important. You can make you can go down the list. There's a lot of important products that came up. But all even AirPods are like now there's 50 variations of AirPods.
And so there just weren't enough shots. And I'm kind of hoping that the Turnis era combined with sort of the pressure of the AI era where everyone is trying to find the new thing because AI does feel like a meaningfully different way to interact with a computer that they just take more shots, right? Not in the like crazy Samsung way, but just in the like they should make a a home device that you can talk to. They should expand AirPods and doing something else. And I I'm kind of hoping that having a hardware person at the lead makes them like try more things without all of that pressure. I'm not sure that they will, but that that's my criticism of the Cook era is that it was so deliberate because everything had to scale to a huge number that sometimes their failures were even bigger failures than they needed to be.
Yeah. I mean, I also think you can look at the relentless drive to scale everything as a big part of the reason Tim Cook has made the political choices that he's made. You you present Donald Trump with a big gold plaque because you want to make more money selling iPhones. Like, it's it's just it's just what it is. And you can chalk that up to straightforward business logic. And I'm sure that's what Tim Cook would do, like this is the price of playing this particular game. But I think he he has spent a lot of time during the Apple 50 celebration and even in some of his like his goodbye letter talking about the values and the beliefs of Apple and I think the case against Tim Cook's legacy will be that he built this company into a hell of a business and kind of lost its soul. But what I wonder is to to your point about the products, I think the part of me that's really excited about somebody like John Tarnis is that there is somebody who thinks about and sort of lives inside of hardware back in charge. Like that that's just an exciting and cool thing. The flip side is he's been at Apple for 25 years. Like this is not a cultural revolution hire on its face inside of Apple. Like which is why I think you do this this way if you're Apple. This is not Tim Cook being forced out. This is not Tim Cook leaving on bad terms. Like it's very clear this is being done in a way that everybody thinks sets Apple up for success. And in part that's being done because his successor has been at Apple for 25 years and knows the company just about as well as anybody. He's been on the executive team for five years. He's been a high level executive there since I think 2013. Like he he is as Apple as Apple gets. And I think there is just something like in the walls at Apple that doesn't let you try and fail publicly, right? Like I think all the time about this thing Google executives used to say, which is that one of the challenges of working at Google is that if you make something that doesn't reach billions of people, they'll kill it because Google's only focused on things that reach billions of people. So if they don't see potential for that, they'll kill it. But what Google will do is ship it. They'll ship they'll ship every possible iteration of it, see what happens, and then kill it. And I actually like the way Google does it is really haphazard and sort of ridiculous, but like I also give Amazon a lot of credit. There was that run at Amazon where they were just like, "We're going to ship every single thing we can even think of to make with Alexa in it. Some of it won't work, some of it will. This is the only way to find out." Apple is the precise opposite of that, right? Like this is the thousand nos for every yes company. And you can chalk that up to Apple misses less often than almost everybody. But especially now at this moment where we have absolutely no idea what the next version of hardware is going to look like. Everybody thinks it's pins or it's glasses. I don't think it's either of those. I think it's something else that no one has done yet. It seems very unlikely that John Turnis is going to be the one who's going to be like, "Let's try a bunch of stuff in public and see."
Oh, I don't think that's going to happen. And I'm making the comparison to Samsung on purpose.
Samsung would ship them all too.
