As John Ternus prepares to step in as Apple’s CEO in just two weeks, investors are eyeing a potential shift in the company’s spending priorities.
The hardware engineering veteran is expected to steer Apple toward heavier investment in artificial-intelligence software, possibly easing the firm’s long-standing emphasis on massive share buybacks in favor of more aggressive R&D and growth initiatives in the AI era.
Angela Palumbo for Barron’s:
“We expect much of the core of Apple to remain unchanged under incoming CEO John Ternus,” [BofA Security analyst Wamsi Mohan wrote in a note on Thursday].
But Ternus might change at least one long-standing strategy that has helped distinguished Apple from its megacap tech peers.
Apple announced when reporting fiscal second-quarter earnings in April that it would no longer provide net cash neutral as a formal target, and will instead independently evaluate cash and debt.“Apple has moved away from a net cash neutral objective, which in our opinion, could signal a period of higher investment in R&D, Capex, and larger M&A,” Mohan said. He added that, while more spending and M&A is not something that Apple focused on under Cook’s leadership, the company might need to make a change to keep up with the accelerating speed of innovation in the age of AI…
Apple has already been spending more to improve its AI offerings. It increased R&D investments by 32% to $11.7 billion in the fiscal third quarter, a move that pushed operating expenses up by 23% to $19.1 billion.
But the company still spends significantly less than other massive tech companies.
MacDailyNews Take: We shall see.
Under Tim Cook, Apple systematically strayed from Steve Jobs’ core vision. Product Design, the very soul of the company Jobs rebuilt, was demoted, sidelined, and subordinated to operations, supply-chain efficiency, and services revenue. The result? Fifteen long years of polished, but profoundly boring iteration: thinner bezels, faster chips, incremental camera bumps, and endless “Pro” variants that rarely moved the industry forward the way the original iPhone, iPad, or even the aluminum unibody MacBooks once did.
Jobs put Design at the absolute top of the food chain. Jony Ive’s group wasn’t a service department; it was the engine. Cook flipped the hierarchy. Hardware engineering, operations, and finance called the shots (poorly; witness Luca Maestri famously rejecting calls to invest in AI early on which is why he’s now sidelined). Design became reactive instead of directive. The Vision Pro launched as an impressive, but overpriced, underbaked curiosity. After billions spent, the Apple Car evaporated. True category-defining leaps simply did not happen.
Now comes John Ternus, a product person, a hardware guy who has spent his career shipping actual devices rather than optimizing margins. Early signals are encouraging: bringing trusted hardware lieutenants back into the fold and already embedding himself with the industrial design group. That is exactly the right instinct.
If Ternus moves quickly to restore Design to its rightful place at the apex of Apple’s decision-making, the company might finally escape the long, comfortable, lucrative mediocrity of the Cook era. Apple doesn’t need another fifteen years of safer, prettier, or just different iterations. It needs the return of products that make people stop, stare, and rethink what a computer in their pocket, on their wrist, or on their face can be.
The hardware engineer is about to become CEO. The question is whether he has the will — and the authority with Cook looming as Executive Chairman — to put Design back on top where Jobs left it. The next few years will tell us if Apple can innovate again… or if the iteration treadmill simply continues under a new CEO. – MacDailyNews, August 4, 2026
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