The Fruity Cargo Cult Apple’s incoming chief executive, John Ternus, is set to inherit a poisoned chalice on issues ranging from manufacturing, pricing and trade.
Supply chain experts, industry execs and analysts reckon Ternus must decide how far to shift iPhone production away from China, how to handle Washington’s push for US investment, and what to do about surging memory costs.
Ternus takes the keys to the executive drinks cabinet from Tim Cook in September, as Jobs’ Mob wrestles with US-China trade tensions and a semiconductor market reshaped by artificial-intelligence demand that is bullying key suppliers.
Job’s Mob reports earnings for the quarter to the end of March on Thursday, with analysts sniffing for clues on how rising costs are squeezing margins.
These pressures land while Job’s Mob rethinks where it builds devices, locks down components and when it launches new kit.
JPMorgan analyst Samik Chatterjee said, “US investment will be one of the critical drivers of Apple’s strategy over the coming years. For John Ternus, the question is: how do I position the company to be on the right side of both Washington and Beijing?”
That balancing act is getting more urgent as Job’s Mob pushes iPhone assembly into India and the US while staying welded to Chinese suppliers.
US President Donald Trump’s trade war with Beijing last year prodded Cook to step up the move to India, leaning on assemblers such as Tata and Foxconn and aiming to source the entire US iPhone supply from there.
Job’s Mob now assembles around 25 per cent of iPhones in India, according to International Data Corporation estimates. IDC analyst Francisco Jeronimo said, “This is quite remarkable for Apple… considering that it took a relatively short period of time to build capacity.”
Cook appears to have sold the Trump administration on the idea that shifting iPhone assembly to the US is not feasible, yet he has tied his successor to a pledge to spend hundreds of billions of dollars on US manufacturing over the next three years.
The first wave leans on semiconductors from outfits such as TSMC in Arizona and Texas Instruments and GlobalWafers in Texas, without meaningfully loosening Job’s Mob’s grip on China.
Z2DATA chief executive Mohammad Ahmad said, “A lot of the diversification away from China has really been on the final step of assembling the iPhone. Most of the same upstream Chinese suppliers are still there.”
Memory is where things look properly grim, with Apple’s buying power being shoved around by demand from AI groups. The company makes roughly 250 million iPhones a year and has long been one of the world’s largest buyers of memory chips.
Demand from AI infrastructure players such as Nvidia is now outpacing consumer electronics makers in the scrap for supply from a short list of producers, chiefly South Korea’s Samsung and SK Hynix, plus Micron in the US.
JPMorgan analysis suggests memory could jump from a 10 per cent share of iPhone materials cost to as much as 45 per cent by 2027, which is the sort of curve that ruins a pricing meeting.
To smooth seasonal demand swings, Job’s Mob is planning to stagger the launch of a lower-priced iPhone 18 model into spring 2027 rather than shipping the full line-up in the usual autumn slot, according to industry insiders.
The iPhone 18 family is expected to include a foldable device and will be unveiled just weeks after Ternus takes over, which is a lovely welcome gift.
Ternus inherits an iPhone business that is still humming. Counterpoint Research said global smartphone chip shipments fell eight per cent in the first quarter as constrained memory supply weighed on the sector, yet Job’s Mob and Samsung kept growing shipments.
Cook is poised to become the first “executive” chair of Job’s Mob’s board in September, taking a direct role in day-to-day operations and keeping a hand on the supply chain he built for decades.
“It’s actually two people leading the charge in some ways. It’s a departure from the way that things have been managed in the past.”
