What the heck is going on at Apple?

Customers try the Apple Vision Pro mixed reality glasses device by US company Apple Inc. during the launch at the Apple store on Champs Elysees avenue in Paris on July 12, 2024. (Julien De Rosa/AFP/Getty Images via CNN Newsource)

Apple for decades has been known for a consistent string of design-forward, tech-defining consumer products that have shaped how people use technology.

Now the company known for its steadiness is going through a shakeup at the top, as both Apple and the tech industry at large are at a crossroads.

Apple announced the departures of three executive team members in less than a week. Meta poached a key Apple design leader. And speculation is mounting that Tim Cook may be preparing to step aside as CEO.

The changes come as critics say Apple, once a tech leader, is behind in the next big wave: artificial intelligence. For one of the world’s most valuable tech companies, a change in leadership could mean a change in how it conceives, designs and creates products used around the world every single day.

“The only thing we can read into this is that we’re headed to a time of increased volatility for Apple,” said Robert Siegel, a longtime venture capitalist and lecturer at Stanford’s Graduate School of Business.

Apple stock (AAPL) is up roughly 12 per cent this year, a much smaller jump than the 30 per cent increase it saw in 2024.

Apple did not immediately respond to a request for comment.

Who’s leaving and why

Planned departures for the following Apple executives were announced just this week:

• Lisa Jackson, Apple’s vice president of environment, policy and social initiatives, is set to retire next year.
• General counsel Kate Adams, also set to retire next year.
• Alan Dye, vice president of human interface design, who is joining Meta as its chief design officer.
• John Giannandrea, senior vice president of machine learning and AI strategy, who will also retire next year.

Apple is bringing in Meta chief legal officer Jennifer Newstead to lead government affairs after Adams retires and serve as its new general counsel. The environment and social initiatives teams will now report to Sabih Khan, Apple’s chief operating officer. Amar Subramanya, Microsoft’s corporate vice president of AI, will be Apple’s new vice president of AI.

And earlier this year, Jeff Williams stepped back from his role as Apple’s chief operating officer.

Apple isn’t the only tech giant making structural changes. Meta on Thursday said it’s shifting some investment away from its Metaverse virtual reality project and towards AI glasses and wearables. Amazon laid off 14,000 people in October as part of a push to move faster in AI by operating more leanly. And Google last year combined its hardware and software teams to better integrate AI into its products across the board.

But Apple is known for having a uniquely tight-knit company culture driven by secrecy.

“This is against the typical culture of Apple. But they need to rip the Band-Aid off,” said Dan Ives, global head of tech research for Wedbush Securities. “Because the AI strategy has been invisible, and it’s going to define Cook’s legacy, how he handles this chapter.”

Apple’s future and challenges

The leadership shakeup comes as questions about Apple’s future loom.

Apple delayed a major update to its Siri voice assistant that was expected to bring it closer to OpenAI’s ChatGPT and Google’s Gemini, turning Siri from a question-and-answer machine into an assistant that can act on a user’s behalf and incorporate information from a person’s phone to personalize responses.

But that upgrade has been pushed off until next year, and Apple’s other AI updates for iPhones, Macs and iPads have been minimal this year.

And Apple’s expensive Vision Pro headset, the first new computing category the company has introduced since the decade-old Apple Watch, is still a niche product.

At the same time, Meta, Google, Samsung and OpenAI have announced significant product expansions in AI this year – from Meta’s new Ray-Ban Display smart glasses to Google and Samsung’s Gemini-powered headset and OpenAI’s push into shopping and web browsers. Google’s Gemini 3 model has also been making waves since its November launch.

Wall Street wants answers about Apple’s AI strategy. In a July earnings call, analysts asked Apple about Siri’s role in driving new products and whether AI chatbots are threatening Apple’s relevance in internet searches. Eddy Cue, Apple’s senior vice president of services, even said during his testimony in a Google antitrust hearing that people may not need an iPhone 10 years from now.

Now Dye, largely the face of Apple’s design studio following the 2019 departure of former design chief Jony Ive, is joining Meta to help shape what the company sees as the next wave of computing. And Ive is helping OpenAI create its first hardware product.

Dye’s decision to join Meta is “more of a direct threat to Apple” compared to the other announced departures, said Joe Tigay, portfolio manager of the Rational Equity Armor Fund.

The iPhone is still a juggernaut

Despite facing pressure in AI, iPhone 17 sales have been strong and are only expected to climb higher next year. Apple is expected to surpass Samsung in smartphone shipments this year for the first time since 2011, according to Counterpoint Research. The company is also one of the few to cross the $4 trillion market capitalization threshold, along with AI giants Nvidia and Microsoft.

And change isn’t always a bad thing, according to Siegel, especially while industries are going through transitions as the tech sector currently is with AI. Bringing in new hires or promoting people from within can “give a different point of view when a company can get trapped in a way of thinking and doing things,” he said.

That could be just what Apple needs, as some analysts say the clock is ticking for Apple to make bigger leaps in AI.

“You can’t have a fourth industrial revolution and watch the AI party through the windows on the outside,” said Ives. “And clearly they need massive changes in leadership.”

Lisa Eadicicco, CNN