Apple's New CEO Has a Hardware Event and an AI Problem

John Ternus has been Apple’s CEO for all of eight days, counting weekends, which I’m sure he worked. This coming Wednesday he headlines his first keynote , an event Apple has titled “ Surprise and shine .” The press has already told us most of what’s on the slides. I’ll be listening for what isn’t.

I’ve spent the better part of two years writing that Apple Intelligence wasn’t at all that, that a smarter Siri was a promise on a slide and that the engine that made Apple one of the most valuable companies in the world was losing torque. Not the iPhone itself. The economics wrapped around it.

The App Store commission is under legal and regulatory pressure on four continents, and the Supreme Court takes up the Epic case next month. The roughly $20 billion Google pays for the Safari search default survived the recent antitrust ruling , but the exclusivity is gone, the contract now has to be rebid every year and the DOJ is appealing to kill the payments outright. AI chatbots are making that default worth less every month anyway. The NFC chip is open to rivals. And the AI Apple promised in 2024 finally shipped in 2026 with Google’s Gemini models underneath it. And it’s still not that smart.

How does Apple’s AI strategy become a business? None of that’s shown up in the numbers yet. Tim Cook’s last quarter as CEO was a barn burner with $109.4 billion in revenue, up 16%. iPhone up 22%. Services at $30.7 billion. More than 1.5 billion paid subscriptions. The stock dropped 6% anyway. That’s because investors weren’t reacting to the quarter. They were reacting to the absence of an answer to the question Ternus now owns. How does Apple’s AI strategy become a business?

We will see three iPhones, all pricey. The iPhone 18 Pro, the 18 Pro Max and Apple’s first foldable, expected to be called the iPhone Ultra. The price points start somewhere near $2,000 and go even higher for the primo brands. Good thing they’ve activated Buy Now, Pay Later. The standard iPhone 18 and the cheaper 18e don’t show up until spring 2027. Prices on the Pros are expected to go up, blamed on memory shortages.

Under the hood there’s a lot of engineering magic including Apple’s own C2 modem with satellite 5G and a variable-aperture camera. Beyond the phones, there’s wearables. The Apple Watch Series 12 and Ultra 4. And rumors of AirPods with cameras that feed what they see into Siri. (Side note: For a brand that’s all about privacy, can someone explain how AirPods that record everything they see and hear without permission meet that requirement? Should I now cross the street when I see someone with AirPods?)

Possibly the long-rumored smart home hub, hopefully more usable than the unusable Home Pod, a new Apple TV and an updated HomePod mini. See earlier comment. The ship dates for iOS 27, which is the release that puts Gemini under Siri and lets users pick which third-party model powers Apple Intelligence features, is reported by some to be September 14 .

What does that lineup say about the business beyond the device? Now, if you read that list as nothing but a hardware extravaganza, you’d be correct. An almost over-the-top one, in fact, run by the best hardware executive Apple has. The foldable is the first...