Systemic failure: will Apple's reshuffle help it catch up in the AI race

Apple has lost four key employees over the past few weeks. First, it was reported that Apple Chief Operating Officer Jeff Williams, considered the company's second-in-command and a possible successor to CEO Tim Cook, had left the company. Meta later said it had hired chief AI officer Zhuomin Pan. And on Friday, July 18, Bloomberg sources reported that Mark Zuckerberg hired two more employees from Apple's AI division - Mark Lee and Tom Gunther.
What were the top managers and engineers who left important, and how might today's crisis at Apple be similar to the company's historic failures?
Firing the successor: who is Jeff Williams?
In 2008, three years before the resignation and death of Apple CEO Steve Jobs, COO Tim Cook was called the top contender to succeed him and "the genius behind his shoulders." Six years later, Business Insider called Jeff Wilms "the Tim Cook of Tim Cook's new Apple."
Williams, 62, is an engineer by first education and spent 27 years working for the company, building the company's supply chain from the ground up to produce iPhone phones.
After Jobs' death, Williams led Apple's new product development, built a product team around its chief design officer, the legendary John Ive (the iPhone creator is now working on a mysterious device for OpenAI), and then replaced him himself.
The Apple Watch smart watch launched under his control has become the pioneer of the wearable gadget market, which is now estimated at $228.8 billion. However, the top executive's recent successes are not due to new projects, but to moving production from China to India and supporting manufacturing amid Donald Trump's trade wars, says The New York Times.
That said, Williams saw product design as the backbone of the business. "We don't spend time worrying about revenue growth. We're not chasing to say: 'Oh, we got another X percent for the analysts,'" he said in an interview with VOX. - "We focus on building products that we believe in ourselves, and the market will put things in place.
The most likely successor to Cook is now considered John Ternus - Apple's senior vice president of hardware engineering. As Bloomberg sources reported in April, he has already been given the secretive robotics division, which was previously overseen by Senior Vice President of AI John Giannandrea. Ternus is precisely focused on product. He notably moved the Mac to Silicon's own processors.
Dead or gone: who will lead Apple's AI division
AI researcher Zhuoming Pan has been with the company since 2021. He is a world-renowned scientist (his Hirsch Index is 55, which means that at least 55 of his papers have been cited at least 55 times by other scientists). In total, Pan's work has been cited more than 43,000 times in the past five years. Pan was the head of Apple's Basic Model Lab, a large-scale deep-learning neural network that is the basis for generative artificial intelligence, the superintelligence that Mark Zuckerberg wants to create.
Sources Bloomberg tells us that Meta has promised to pay Pan more than $200 million over several years of his contract.
Gemini chatbot chief engineer Lianliang Cao called Pan "a rare kind of engineer who is respected and loved by everyone." "He has deep knowledge not only in machine learning but also in infrastructure. But at the same time, Pan is humble and always ready to help," he said.
It's not yet clear which Pan is the manager. But as the man in charge of the artificial intelligence lab in Cupertino, he also shares some of the responsibility for Apple's lagging AI technology.
Mark Lee, who Bloomberg's sources say is also transitioning to Meta, is the first employee Pan has hired at the lab in 2021. Pan's other employee, Tom Gunther, worked at Cupertino for nearly eight years and was one of the leading AI engineers there, but quit a month ago and went to work for another company, from which he was poached almost immediately by Meta. Back in July, Apple published a preprint of a research paper co-authored by Gunther and Lee on a new AI learning system that can run on different types of computer infrastructure and quickly apply point model changes.
In late June, AppleInsider reported that Apple nearly lost its entire development team for MLX, its open-source machine learning framework optimized for Apple Silicon. But then management made the engineers an offer they couldn't refuse;
Seven nannies for AI
The position of chief operating officer will be filled by Sabih Khan, but his role will be narrower than Williams'. The design team will report directly to Tim Cook, but it's unclear who will be in charge of Apple Watch development and further development of Apple Health;
Former Apple engineer Matthew Moore is skeptical of Khan's creative abilities, "Sabih is a lot like Tim Cook. Jeff was a little more product-focused. Sabih is a brilliant operator, and he works as methodically as Tim.
Zhifeng Chen, a scientist whose work has been quoted 92,000 times since 2020, will now head the Basic Model Lab instead of Pan. However, he will not supervise engineers directly, he will have several managers who will interact with developers.
How lagging AI race made the market doubt Cook
In June 2024, Appleintroduced the Apple Intelligence AI system at its developer conference, promising that artificial intelligence would be able to perform routine tasks for users. In phones and macbooks, AI was supposed to be able to organize notifications, fill out forms, draw images, write and edit emails and texts.
On the day of the announcement, the corporation's stockrose in value by 5% to hit a new record of $207. The new features spurred sales of the company's new phones, which had previously fallen for two years in a row. However, the release of the new functionality was delayed until the fall and appeared in devices only in the U.S. market, and Siri has yet to become a full-fledged replacement for the secretary.
Although the company promoted personalized Siri assistant features since the summer of 2024, including on TV and at the iPhone 16 launch, even a year later they have not been made available to users. In March of this year, Applerecognized that it expects to release new functionality "within a year." Cook can no longer fix the situation and should leave, account Walter Pajsak and Joe Galone of LightShed Partners.
Apple's voice assistant is lagging behind popular chatbots, and against that backdrop, the market is having doubts about the giant's ability to meet the challenges of the times, writes Fortune in an article headlined "Tim Cook has delivered more returns to shareholders than Steve Jobs, but in the age of AI, its weaknesses have become apparent." Bloomberg columnist Mark Gurman predicts that the problem can't be solved with internal resources. He thinks the company should acquire a large AI startup, such as Perplexity, and bring in new talent from the market. This idea is called "obvious" and supported by Wedbush analyst Dan Ives.
PP Foresight lead analyst Paolo Pescatore, on the other hand, believes Apple has time to fix the situation with internal resources. "It may seem like competitors are leading the AI race, but right now this functionality is not in demand among users and is not driving revenue growth," he told Oninvest. He calls the AI race a "marathon, not a sprint": "Let's not forget that Apple's recent products have always had machine learning technology under the hood."
D.A. Davidson's head of technology research, Gil Luria, shares this position. "Apple has a very loyal and solid customer base that will wait patiently for the company to finally unveil new artificial intelligence capabilities," he tells Oninvest. He believes that as new technologies develop, Apple will have a hard time convincing users to upgrade to the latest iPhone models.
Both Pescatore and Luria say Apple will need to find a balance between new features and the ability to not disappoint its loyal user base.
It will probably still be up to Cook to handle it. Few believe in his imminent resignation. CEOs of public companies are evaluated by the dynamics of stock growth. Since the beginning of the year, they have fallen 13.40%; since Cook took office, their value has risen 1,500%, concludes Bloomberg.
Apple: a history of failure
In its 49-year history, Apple has been in many situations that have taken a serious toll on it. In some of them you can find parallels with today's situation of AI failures.
- How Apple wasted its energies on a "child conceived in an orgy"
Launched in 1980, the Apple III computer was supposed to compete with the IBM PC, but became one of the most unsuccessful in the company's history. Apple co-founder Steve Wozniak estimates that the project resulted in a loss of $300 million, now $1.1 billion. For comparison: on the first day of trading after going public, Apple's capitalization was $1.778 billion.
The Apple III was planned to be business-oriented. Its price started at $4340: about $17,000 in current prices. The Apple III could display lines twice as long as the Apple II: up to 80 characters, was twicefaster, and had a built-in five-inch floppy drive, in demand in the business world. But because of software problems, users were inclined to use the new computer's built-in Apple II mode, which provided compatibility with older software. Newspapers at the time wrote, "Why buy a $5000 computer with an emulator when you can work on an old one for $2500?"
Back then, everyone blamed each other: top management on engineers. Engineers - on top management, including Steve Jobs, who interfered in the development. One of the first Apple employees, Randy Wigginton compared that computer to a baby conceived during an orgy: "It's a problem for everybody, and yet the baby is here, but everybody says it's not his";
- An expensive burden: the failure of Apple's first laptop
In 1989, Apple was led by former Pepsi president John Sculley. Under his leadership, the company launched its first-ever laptop, the Macintosh Portable. It was a market failure that characterized all of the company's problems at the time, Apple historians agree;
Sculley and his deputies pursued a "right-corner" strategy in the market - on the cheap-expensive and low-power graph, Apple computers would occupy the upper right corner as the most powerful and expensive devices on the market.
The $6500 device ($17,000 in modern prices) could run on battery power for 10 hours, had a high-quality 10-inch screen with an active matrix, and could be connected to any extension designed for Apple desktops. But the laptop weighed more than 7 pounds, couldn't be held on your lap, and didn't fit on a folding table on airplanes.
The release of this laptop was the end of a career for Jean-Louis Gassé, who was seen as a potential successor to Sculley. In the mid-1990s, Gasset and Jobs became rivals for the opportunity to lead Apple and save it from going out of business (Jobs won);
Will there be a savior for Apple's AI now?
This article was AI-translated and verified by a human editor