Tim Cook’s legacy is turning Apple into a subscription

Tim Cook’s tenure as CEO at Apple, which is come to close September 1, will likely be defined by operational efficiency and financial growth, ushering Apple into its trillion-dollar era.

But his most important achievement may be doubling down on Apple’s services business, which includes iCloud, the App Store, Apple Music, Apple TV+, News+, and more. It’s the subscription layer on top of iOS, and almost all of the service’s apps are tightly integrated with Messages, the glue that keeps people glued to their iPhones.

During Apple’s most recent earnings reportfor the quarter ending December 2025, its services business reached an all-time record of $30 billion. This was a 14 percent jump from the same quarter the previous year; services have also been a bigger money-making business than Mac, iPad, Apple Watch, Home and other accessories combined. For the entire fiscal year 2025, Apple services generated more than $109 billion for Apple, again 14 percent more than 2024.

When Cook first took over as CEO in 2011, “services” weren’t even broken out into a separate revenue category, even though iTunes, by proxy, generated about $6 billion annually.

As the analyst Ben Thompson point to itsome of the groundwork for Apple’s services preceded Cook’s tenure as CEO. The App Store launched in 2008the year after Steve Jobs unveiled the iPhone, and it was Jobs’ foresight to levy up to a 30 percent “tax” on paid apps and in-app purchases. Jobs loyalists Phil Schiller, who now serves as an Apple “fellow,” and Eddy Cue, who is the company’s senior vice president of services, were the driving forces behind this strategy. (Schiller is the CEO who famously changes the developer tax– slightly – in 2016, to make it more favorable to app makers, in response to complaints that Apple unfairly suppressed developers.)

But it was under Cook that Apple transitioned from the world’s most popular consumer hardware company to one of the world’s most powerful platform companies. And that was largely due to services. The question now is whether Apple CEO John Ternus, who will soon take the helm as CEO, can expand Apple’s platform into the generative AI era. Until now, Apple’s approach to advanced AI — specifically generative AI, since Apple has been using machine learning in all sorts of clever ways for years — has been secretive.

Apple’s virtual assistant Siri, hailed as groundbreaking when it first launched in 2011, has been plagued by bugs, limitations and general unhappiness. In 2024, the company announced ‘Apple Intelligence’, a new name for AI features that would be embedded in products like Siri. But after that delay release of an AI-enhanced Siri in 2025, Apple executives working on AI began to leave the company. Robby Walker, a senior manager working on AI, left in October of that year. At the end of 2025, Apple’s head of AI, John Giannandrea, retired. Following Giannadrea’s departure, longtime Apple software chief Craig Federighi apparently took control of Siri.

Ternus’ chops are in hardware. He has been Apple’s senior vice president of hardware engineering since 2021. Prior to that, Ternus was a vice president of engineering, and joined the company’s product design team in 2001. A hardware executive isn’t the most obvious choice to lead Apple as it figures out where it stands on LLMs, inferential learning, Siri-as-AI chat, AI, privacy, implication, coding, and more.

Except that Ternus himself was also in charge of one of the most essential platforms for future Apple: its chip business. Ming-Chi Kuo, the famous Apple analyst, pointed out that Ternus’ most important step in the last few years “led the Mac transition from x86 (Intel) to ARM (Apple’s own Apple Silicon).” It was a “system and platform-level transition, essentially a brain transplant” that required a very high level of execution and tight cross-functional coordination. Without it, Kuo continues, Apple wouldn’t have the hardware position it has now as it gets ready for AI devices.