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Apple Departures Point to Challenges for iPhone's Dominance

Dow Jones12-05 17:00

Apple is facing a wave of executive departures as the company continues a period of transition, not only among its leadership but, if rivals have their way, for its business as well.

On Thursday, the company announced that its general counsel and head of policy will both retire next year. On Wednesday, a top designer left for Meta Platforms. On Monday, Apple said its head of artificial-intelligence strategy would retire. Its chief operating officer announced his retirement in July, and its chief financial officer has transitioned to a new role.

The executive departures underscore a changing of the guard under way at Apple, even as Chief Executive Officer Tim Cook himself shows no sign of stepping down. Cook and his new lieutenants face a critical test preparing Apple for the AI era and the wave of new competitive devices that result.

Further down the org chart, dozens of Apple employees have defected to OpenAI and Meta in recent months, part of a long-term brain drain that has robbed the company of innovators and seeded rivals with expertise they hope to use to dethrone the digital-device king.

Apple's reign will continue as long as consumers access their online services on its device. And that dominion over the means of app distribution rankles other tech heavyweights who are trying to find ways to control their own destinies, including Mark Zuckerberg, Sam Altman and Elon Musk.

Zuckerberg this week hired Apple's Alan Dye, a top Apple designer, after hiring away a handful of Apple's key AI staffers during a recruiting blitz he embarked on as he sought to revamp Meta's AI work. After his effort to create a "metaverse" to supplant the iPhone failed, he has now turned his attention to AI and smartglasses to achieve the same goal.

Altman paid $6.5 billion to "acqui-hire" Steve Jobs's protégé Jony Ive, who helped build the iPhone and the Apple Watch, along with Ive's team that comes with other ex-Apple heavyweights. They are planning an AI device that they hope will be the future of computing. The new hardware arm of OpenAI has been hiring aggressively from the iPhone maker recently as well.

Dozens of Apple engineers and designers with expertise in audio, watch design, robotics and more have decamped to OpenAI in recent months, according to a review of LinkedIn profiles.

Musk has at times considered building a smartphone himself owing to frustration with Apple's dominance, The Wall Street Journal has reported. His social-media platform, X, is suing Apple because he is unhappy about the placement of his own AI app in the App Store.

None is an immediate threat. Consumers' lives are on their iPhones. There isn't yet a killer AI app that would make them move their digital selves, much less a device that offers it.

Yet without a coherent AI strategy of its own, one that can convince customers and employees that the company can play a meaningful role developing the defining technology of the decade, Apple is leaving an opening for rivals.

One executive still firmly encamped at Apple is Cook. Despite turning 65 last month, an age at which many CEOs are contemplating retirement, Cook hasn't slowed down. He has demonstrated his value to shareholders again this year by deftly handling President Trump, beating back the threat of tariffs and returning Apple's stock to record territory.

If he can deliver successful AI products before he departs, Cook can secure his legacy as one of the great tech executives, while giving his successor a running start.

News Corp, owner of The Wall Street Journal, has a commercial agreement to supply news through Apple services. It has a content-licensing partnership with OpenAI.

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