In September, Apple will complete its biggest leadership transition in 15 years, with Tim Cook handing the CEO role to John Ternus, who currently leads hardware engineering. For many former insiders and observers, that isn’t just a change in title. It is a referendum on whether Apple can reclaim the product design mojo associated with the Steve Jobs era, when design teams and founders could bulldoze “good enough” thinking.

Fortune’s reporting frames the pressure clearly: with more than half of Apple’s revenue still tied to the iPhone, a design stagnation is not an abstract risk. It is a direct threat to the machine that prints money today. Several experts told Fortune that Apple has struggled to create or transform a product category that becomes part of daily life since the Apple Watch’s debut in 2015, and that iPhone launches have settled into a rhythm of incremental updates rather than category-level disruption. Add commercial disappointments like Vision Pro and ongoing problems around Siri, and the question becomes unavoidable: can Ternus turn hardware engineering into consumer breakthrough energy again, not just operational excellence?

There is a second reason this moment feels different. Cook’s tenure has been enormously successful by the numbers. Annual revenue has grown by more than $300 billion since he became CEO in 2011, and profits have more than quadrupled. Few companies, if any, top Apple at building elite hardware fast with a sturdy supply chain, and Apple remains a gold standard in consumer products. The catch, according to Fortune’s sources, is that the same operational discipline that scaled Apple into an incumbent also appears to have dampened the old “product first” culture.

Under Jobs, former staff said Apple’s industrial design team was an all-powerful force and the heart of product innovation, with a culture that fused software and hardware into a tight “walled garden” across devices. The reporting emphasizes Jony Ive’s role: Jobs and Ive collaborated nearly daily, and Apple prioritized people committed to figuring something out over those who cited technical limitations. Jobs famously rejected focus groups, believing customers didn’t know what they wanted, and pushed for products so intuitive they needed no instructions, while saying no to anything mediocre to focus on what was radical. Fortune also highlights how survival instinct drove constant bets: Jobs’ Apple was not yet the cash cow it would become, so reinvention often meant wagering the business on one or two products at a time.

The decline, several experts argue, came after Jobs’ death. The design obsession faded as Apple poured energy into manufacturing iPhone and other bestsellers with “military precision” at massive scale. Under Cook, Apple protected profit margins and expanded services like iCloud, and the design team’s influence waned because the company had different priorities and different incentives. Fortune points to designers leaving, including Danny Coster, Rico Zorkendorfer, and Christopher Stringer, who left in 2017 after nearly 22 years. Stringer was frustrated that the HomePod he worked on had been treated as an accessory rather than a core innovative product. Other designers, Fortune says, grew tired of the yearly cadence of iPhone releases, and Ive became more elusive as an executive. Even former investor Arif Karim, quoted by Fortune, captures the cultural shift in business terms: Apple was once the underdog fighting, and now it is the incumbent, which means it is “not as exciting anymore.”

Now layer in a new competitive and legal landmine: design is not only an internal culture issue, it is an external battle for proprietary advantage. The irony that Fortune underscores is sharp: Ive’s AI hardware startup, io Products, was acquired by OpenAI in 2025. And on July 10, Apple sued former vice president Tang Tan and another former employee, accusing them of taking trade secrets to OpenAI. Before becoming OpenAI’s chief hardware officer, Tan worked closely with Ive at io, which is named in the lawsuit; Ive is not. OpenAI responded that it has “no interest in other companies’ trade secrets” and remains focused on building innovative technology. For boards and executives, this is the kind of story that can quietly reshape decisions about talent, review processes, and how product teams protect the inputs to new categories.

Ternus, according to Fortune, reportedly has tried to address internal concerns by telling staff that the design team will continue to be central to Apple. But experts interviewed for this story say talent and influence are the biggest lever he can pull. Fortune says Apple currently lacks a clear design or product star, and that the company keeps losing respected staff. Two vice presidents, Paul Meade and Alan Dye, recently left for OpenAI and Meta, respectively. This matters beyond headcount. When design talent exits, the company risks losing not only individual skills but also the decision-making muscle that used to force tradeoffs toward user experience, not internal convenience.

There is also a strategic logic tying all of this together. Gene Munster, a veteran Apple analyst turned investor, told Fortune that AI is rapidly reshaping how people interact with devices and services in ways that could endanger Apple’s consumer hardware grip. He said Apple has to reinvent itself, because if it does not, “somebody’s going to come out with something 10 times better,” and it will happen slowly. Several analysts said Apple can go back to a model where its existing businesses come to the design team for direction rather than designers reshaping ideas to fit operations and finance. They also describe a potential “problem-first” approach, starting from core human problems and applying technology to solve them, rather than starting from what is operationally convenient. Fortune adds that this approach would likely require deeply integrating AI, especially Siri, across Apple’s operating systems.

So what should executives take from this? If Apple is still leaning on the iPhone for more than half its revenue, design and product culture cannot be an HR initiative. It has to be a control system for product bets. In the Jobs era, the incentive structure rewarded risk, intuition, and consumer obsession. Under Cook, the incentive structure rewarded execution at scale. Ternus’s defining test, Fortune suggests, is whether he can combine both: keep Apple’s supply chain discipline, but restore enough design influence that new categories can emerge again. For anyone on a board, in product leadership, or investing in the ecosystem, this is a high-stakes question about whether the world’s most valuable consumer hardware company can still surprise itself.