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Tim Cook winds up 15 years as Apple CEO tomorrow, succeeded by John Ternus, which is probably the most significant event of the week in tech. We can’t call it news, as it was announced a few months ago, but it’s worth taking note of now that it’s actually happening. After all, while CEOs of small to midsize tech companies come and go fairly often—PayPal has had three in the past five years, for instance—we don’t get a CEO changeover at the half-dozen biggest tech companies very often.
The last CEO transition at one of those big companies was Andy Jassy, who took the reins at Amazon in 2021 (yes, five years ago!). You have to go back to 2015 for the one before that, when Sundar Pichai took over at Google, and a year before that, when Satya Nadella became Microsoft CEO. It may be a few years before we get another one. With Cook’s exit, the oldest big tech CEO is Jensen Huang, who is reportedly 63, while his counterparts at other companies aren’t yet 60. It’s hard to imagine Huang stepping down anytime soon: He seems to have the energy of a 25-year-old.
As for Ternus, what should we expect? This isn’t a case, as frequently happens with CEO changeovers, of anything needing to be “fixed” at Apple. The iPhone maker has done very well under Cook—revenue has expanded to an expected $477.7 billion for the year to September from $108 billion in fiscal 2011 when he took over. In the near term, the expected AI overhaul of Siri and the release of the new foldable iPhone should give sales something of a tailwind.
In the medium term, though, Apple still faces the lack of a major new product, the same issue that has clouded its future for a while. After all, the iPhone market is mature. Meanwhile, Apple faces potential competition from OpenAI, which plans to release new devices tailored for the AI world sometime in the next year. Ternus has time to make his mark, but not that much time.
Cook, by the way, is not departing Apple completely. He becomes executive chair, while John Ternus succeeds him as CEO. Apple described Cook’s new role as “engaging with policymakers around the world,” which is an important job given the geopolitical tensions between the U.S. and China. Will his presence constrain Ternus from pursuing his own agenda? We’ll have to see. For more on Ternus, see here and here.
Also This Week
We’ve got some tech earnings, including from Palo Alto Networks, Snowflake and MongoDB. And Shein, the fast-fashion retailer that until last year was a big deal in online shopping, is due to go public on the Hong Kong Stock Exchange.
Shein’s IPO won’t be what the company once hoped for. Instead of the $98 billion valuation it reached in 2022, it’s due to sell shares at a valuation of around $26 billion. The end of a loophole that allowed Shein’s U.S. customers to avoid paying duties on imported items worth less than $800 shrank its U.S. business in the first quarter, Shein’s disclosures have shown. We’ll be closely watching where the shares trade when they open.
As for earnings, here’s what analysts are expecting from the three companies we’re highlighting, courtesy of S&P Global Market Intelligence:
Palo Alto Networks (Tuesday)
Revenue: $3.35 billion +32%
Earnings per share: 50 cents +39%
MongoDB (Tuesday)
Revenue: $734.4 million +24%
EPS: 6 cents a share compared with a net loss of 58 cents a share
Snowflake (Wednesday)
Revenue: $1.481 billion +29%
EPS: A loss of 77 cents a share compared with a loss of 89 cents a share
In Other News
• PayPal shares tumbled 12% on Friday after Bloomberg reported that Stripe and private equity firm Advent International had abandoned their attempt to buy the company.
• Chinese tech giant Tencent Holdings on Friday launched a preview version of its new flagship open-source model, Hy4, which demonstrates a significant improvement in performance over its predecessor.
• Chinese AI firm Z.ai’s new open-source model is generating a lot of buzz because of its near–frontier-level capabilities at superlow costs. This further intensifies the price competition in the global AI model market.
Today on The Information’s TITV
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