Apple and the Ghosts of Companies Past, Privacy at the Expense of Performance, The Cook Question
Summary
Ben Thompson’s explicit conclusion is that Apple needs new leadership—not because Tim Cook failed, but because Apple now needs to reverse parts of the system he successfully built. Cook remains especially valuable in balancing Apple’s relationship with China amid tariff uncertainty, and “you can’t argue with the results.” Yet privacy absolutism, strained developer relations, and supply-chain concentration all point toward a phase where “Apple is in a different phase, and the world is in a different phase.”
Apple’s privacy advantage has hardened from a business-model benefit into an “unshakable religion” that may now constrain product quality. Thompson argues that computing always requires trusting someone; customers chose Apple because selling excellent hardware aligned it with them, not because Apple eliminated trust. Private Cloud Compute will, by design, struggle to match the scale and capability of shared infrastructure from ChatGPT or Gemini—and users’ revealed preference is performance.
The strongest AI move would be to turn Siri into an API endpoint and let users select ChatGPT, Claude, Gemini, DeepSeek, or another system-wide assistant. That would make the iPhone “the ultimate platform play,” eliminate pressure for Apple to win the model arms race, and let it benefit from competitors spending “billions and billions and billions of dollars.” Apple could offer Siri as the private default while letting users decide whom else to trust.
Opening the iPhone to outside AI could weaken app lock-in or help another company build the device that eventually replaces it, but Thompson thinks that erosion is coming anyway. The choice is between leaning into Apple’s platform strength or prolonging the old app layer until “the eventual loss of your position” becomes more abrupt. His Windows analogy: Microsoft defended its legacy application model instead of designing the best internet-native phone, and Apple risks repeating that error with Siri and app intents.
AI should be the bridge to Apple’s next device, not an unnatural extension of the iPhone’s existing software hierarchy. Thompson’s rule is that “every affordance you make to support the old paradigm is going to compromise the experience for the new paradigm”; even Vision Pro’s support for iPad apps may be a handicap, though he concedes that case is less clear if the product should really be a Mac. Apple’s historic strength was breaking compatibility and moving forward: “Stop trying to be backwards compatible.”
China is the second long-cycle risk: Cook’s supply-chain system helped save Apple, but the resulting concentration may take painful years to unwind. Apple financed and trained Chinese component suppliers partly to escape Western and Taiwanese supplier margins, helping create an ecosystem that later served drones and rival smartphones. Thompson expects “a really painful few years” of diversification and doubts the architect of that system is the right person to reverse it.
Intel is the warning that strategic failure can remain invisible in earnings and the stock price until the next platform arrives. As fabs rose from roughly $500 million to $25 billion, Intel needed outside volume and ecosystem expertise, yet its integrated culture resisted becoming a customer-oriented foundry; once it lost the process lead, it was also difficult to work with. Thompson stresses this is not a short call on Apple: “These are the timelines that actually matter in technology”—five to 10 years between decisions and consequences.
Apple may require visible pain before any successor has the authority to change a company that still looks highly successful. Its executives are generally in their upper 50s and its board in its upper 60s, leaving Thompson doubtful that the senior ranks adequately represent 2035. Separately, Apple TV+ reportedly loses more than $1 billion annually despite about 45 million subscriptions and less than 1% of connected-TV viewing, although Sharp sees its increasingly reliable “solid B+” programming as a new-age HBO and defensible marketing spend.
Deep dive
1. Cook succeeded so thoroughly that succession became taboo
Pressed by Andrew Sharp to say what recent Apple criticism had only implied, Thompson answered plainly: “I do think Apple needs new leadership.” His hesitation reflects humility about judging complex companies—and the fact that Cook may currently be doing his most important job better than ever by balancing Apple’s relationship with China amid tariff uncertainty.
Cook inherited skepticism as an operations executive following Steve Jobs, yet Thompson considers it difficult to argue that anyone could have managed the succession better. This is not his Steve Ballmer critique: Ballmer, in Thompson’s view, misunderstood Microsoft and coasted on its past, whereas Cook has been “a great CEO” whose record earned extraordinary deference.
The distinction is phase, not failure. Jobs took Apple from A to B and Cook from B to C; Sharp’s formulation is that C to D may require someone else. Thompson agreed: “Apple is in a different phase, and the world is in a different phase,” making new direction more important than relitigating Cook’s performance.
2. Privacy became a religion after starting as strategy
Thompson’s original “strategy credit” critique was that Apple could advertise privacy because its hardware business did not require the data-funded advertising models of Facebook or Google. What began as incentive alignment became a guiding principle and then “this unshakable religion,” treated as more important than the quality of the computing experience.
His foundational claim is that “you are always trusting someone.” Every phone maker can technically access device data; the iPhone’s advantage is that customers trust Apple because its economic incentive is to sell them a phone. Apple did not abolish the root of trust—it offered a counterpart whose business model aligned with the user.
Thompson still strongly supports uncompromised device security because users cannot build their own secure enclave or hardware root. He was more comfortable with the old “uneasy compromise” in which the device remained encrypted while warranted iCloud backups could be provided to authorities: highly concerned users could disable cloud backup, even if running their own secure environment was difficult.
Sharp’s pushback—worth keeping—was that this still sounded like principle, not religious zeal. Thompson located the crossing point where Apple restricts users “for your own good,” even when that produces an inferior experience. The betrayal is not of privacy but of Apple’s broader promise: “I go to you ’cause you’re the best, and they’re not the best.”
3. Apple should make the iPhone the neutral AI platform
Apple’s local-first AI and Private Cloud Compute architecture may satisfy its privacy doctrine, but Thompson argues it must be inferior in some respects to an always-running, highly parallel ChatGPT or Gemini fleet. Dedicated per-user environments cannot match the same model size, memory utilization, scalability, and infrastructure efficiency; there is a genuine trade-off between maximum privacy and capability.
Users’ revealed preference, in his telling, is “a really great AI model” that works. He cited the EU’s objection to Meta’s paid, non-personalized alternative: few users wanted to pay, suggesting many were content to exchange data for the service. Apple’s extra approvals and handoffs before difficult queries reach OpenAI add friction against that preference.
Thompson’s proposed pivot is simple: “Imagine if Siri was an API endpoint and you could run the AI assistant of your choice.” Apple could keep Siri as the secure built-in option while allowing users already invested in Google services to select Gemini, or others to choose ChatGPT, Claude, or DeepSeek for system-wide access.
Sharp argued this would immediately relieve Apple’s pressure to catch up and impress Wall Street; Thompson went further, calling it “the ultimate platform play.” Apple could provide deep operating-system endpoints, foster model competition, and obtain the benefits of enormous third-party investment without funding the model arms race itself.
4. Preserving app lock-in may deepen the eventual break
Google is becoming the integrated player in the AI paradigm, combining its operating system, cloud, models, Gmail, Docs, and other services into an experience others may not reproduce. Apple must decide whether to compete “on Google’s turf” with privacy-imposed constraints or change gears and become the modular platform on which competing assistants flourish.
Thompson acknowledged both risks of openness. Deep iPhone integration could help an AI provider become capable enough to build the next device, while users loyal to ChatGPT or another assistant could become indifferent between iPhone and Android hardware. His answer is not that these threats are imaginary, but that AI will diminish app-based lock-in regardless.
Windows supplies the analogy: the web loosened Microsoft’s control of applications and made Macs viable because device choice mattered less when everything became a web app. Microsoft responded by extending the Windows application paradigm into a phone rather than asking what the best internet-native phone should be; the result was “a crappy internet communicator” nobody wanted.
Apple now risks making Siri and app intents the exclusive extension of its smartphone app layer. Thompson instead calls AI “the bridge” to devices possible only in the next paradigm: “Stop trying to be backwards compatible.” His Vision Pro caveat is revealing—iPad-app compatibility may burden the new experience, though that criticism is less decisive if Vision Pro should fundamentally be a Mac.
5. China dependence is Cook’s triumph turned structural risk
Thompson credits Cook with saving Apple “just as much as Steve Jobs did.” Jobs repaired culture and products; Cook fixed excessive models, inventory, and a supply chain posing existential risk. Apple entered China after other PC makers, then evolved from follower to leader as Apple’s supply chain and operations scaled.
That success created today’s concentration. Apple funneled money to Chinese component makers and helped bring them up to speed, partly to avoid paying Western or Taiwanese suppliers’ margins, then used those alternatives in negotiations. Those firms subsequently served drone makers and other smartphone companies, concentrating manufacturing capability around an ecosystem Apple had helped build.
Sharp connected the three Cook-era threads: restricted developers, privacy transformed into doctrine, and total China dependence. Thompson agreed that “a new CEO signals that we’re changing directions on all of them”; diversification cannot happen overnight, but Apple is “in for a really painful few years” if it seriously begins unwinding the exposure.
6. Intel shows why 2035 problems demand action in 2025
Thompson’s 2013 warning that Intel needed a foundry was early relative to visible pain but arguably late relative to the ideal decision point. Apple is similar: current iPhone sales may remain strong for years, yet changes made now determine whether the company is positioned for whatever breakthrough appears five, eight, or 10 years out.
Intel’s structural problem was moving from an integrated model—designing and manufacturing chips customers largely had to accept—to a modular foundry serving other companies’ designs. That required a customer-service culture Intel lacked. While it still had the fastest process, Apple or Nvidia might have tolerated the difficulty; after Intel lost that lead, Thompson asked, “What reason is there to go to Intel?”
Economics amplified the cultural failure. A fab costing $500 million could survive on narrower volume; a $25 billion facility requires astronomical production. Intel was not merely competing with TSMC but with capital and expertise from “Nvidia, and Apple, and AMD, and Qualcomm, and MediaTek,” an ecosystem collectively invested in TSMC’s success.
Intel’s stock continued rising for years after Thompson’s warning, so he explicitly rejects treating this Apple thesis as a short recommendation: “If you shorted Intel stock based on my article, you got really screwed.” His concern is readiness—Intel missed insatiable AI-chip demand because it had not developed foundry capabilities while it still had a manufacturing lead.
7. Apple may need a generational reset before a strategic one
Cook has enough goodwill that departure will “almost certainly” have to be his own call. Thompson suggested that Cook stay part of the company to help with trade matters. Yet Apple’s executive team is broadly in its upper 50s and its board in its upper 60s, prompting the question: who at the top is accountable for 2035?
The issue is perspective, not a categorical claim about age. Most current leaders will not be at Apple in 2035, while customers and the institution will live with their choices. Thompson said Apple lacks a board- or executive-level figure with the long-duration owner’s mindset to insist, “We have to do right by them first.”
Thompson argues that Apple’s privacy posture has led it to feel it can do no wrong elsewhere. He feels more betrayed by deliberately limited iCloud storage and an expanding advertising push than by sending a query to ChatGPT. He thinks users actually trust Apple because great products make them happy: “Apple makes crappy products, I’m not gonna trust them.”
Succession is hardest precisely because Apple still performs well. Nadella could transform Microsoft after Ballmer’s failure and a decade of flat stock; an Apple successor may lack authority to reverse successful-looking systems before crisis arrives. Thompson floated a messy path: someone known today succeeds Cook, problems become clearer, and a younger generation takes over three or four years later—hopefully before it is too late.
8. Apple TV+ has quality momentum without platform-scale economics
Sharp cited The Information’s figures: Apple TV+ reportedly loses more than $1 billion annually, reached about 45 million subscriptions last year, and accounts for less than 1% of monthly connected-TV streaming in the United States. Apple had spent more than $5 billion annually on content since its 2019 launch, trimming the budget by roughly $500 million last year.
Despite those economics, Sharp reversed his earlier dismissal of the service. Friends and family increasingly find programs across genres, and he sees Apple approaching a “new age version of HBO”: not necessarily great, but consistently adult, “solid B+” television versus what he rated C+ at Netflix and D+ at Amazon.
Thompson said the positioning fits Apple: expensive, polished, exclusive programming at one end and YouTube or TikTok user-generated content at the other. He also supplied the investor check—Sharp sounded like a 1990s Mac partisan insisting the product was better while Microsoft made the money. Even so, Thompson said that if Apple is going to spend money and have a “glorious fade,” high-end entertainment is defensible marketing expenditure.