The App Store May Face Darker Days Under Ternus
Toggle Dark Mode
Last week saw the culmination of the most significant leadership changes to come to Apple in fifteen years. While the headline transition was obviously John Ternus taking over as chief executive officer, it was far from the only seismic executive shuffle to occur.
As Tim Cook said his parting words and moved “upstairs” into a fresh executive chairman’s seat, the transitions also saw the final departure of Kate Adams, who had announced her impending retirement in December, the retirement of former CFO Luca Maestri, who had stayed on as vice president of corporate services until last week, and — most significantly — the end of Apple Fellow Phil Schiller’s role as App Store czar.
Schiller is easily Apple’s longest-serving senior executive. While he’d previously worked for Apple’s marketing department in 1987, he rejoined the company when Steve Jobs took the helm in 1996 as the senior vice president of worldwide products — a role that was later renamed to worldwide marketing. That was two years before Tim Cook joined Apple to become senior vice president of worldwide operations.
However, while Cook moved on to become chief operating officer, chief executive, and now executive chairman, Schiller remained the head of worldwide marketing until 2020, when he handed the reins over to his chief lieutenant, Greg Joswiak, and became one of the very few Apple Fellows, joining such luminaries as Apple co-founder Steve Wozniak, original Lisa and Macintosh designers Bill Atkinson and Rich Page, and famous Macintosh advocate and evangelist Guy Kawasaki.
This makes Schiller something of a legend. Even so, he remained in a working role as an Apple Fellow, continuing to head up the App Store and Apple Events. That changed last week when the 66-year-old executive announced that it was time to step back. Schiller will remain an Apple Fellow, although it’s less clear what he’ll be doing in that role.
Instead, the App Store is now being handed over to Eddy Cue, Apple’s senior vice president of services. There’s some logic to that; having the App Store managed by the marketing division was always a bit unusual, but then again so was the Apple Watch, Health, and Fitness being handled by the chief operating officer, Jeff Williams.
That division went through a similar shift last year when Williams retired, with Cue picking up health and fitness — and merging them into a single portfolio — while the Apple Watch hardware went to John Ternus’ hardware engineering division (which will now be headed up by Johny Srouji as the new chief hardware officer) and watchOS fell under Craig Federighi’s software engineering division.
Putting the App Store under Cue makes the portfolio consistent. All Apple services are now under the senior vice president of services. Unfortunately, the jury is still out on whether that will be a good thing for the App Store — at least for anyone other than Apple’s bankers and shareholders.
For all of the controversies around the App Store, Schiller nevertheless had a reputation for championing a more moderate approach to its strict monetization.
Perhaps the most infamous of this was a 2011 email that came out as part of the Epic v. Apple trial in 2021, where Schiller suggested that Apple should eventually consider a more balanced commission structure than the 70/30 split that it’s traditionally followed, suggesting a “$1B a year run rate” should be enough to lower the developer commissions and stay competitive.
Last year, in a scathing ruling against Apple’s App Store policies, Judge Yvonne Gonzalez Rogers wrote that “Phillip Schiller had advocated that Apple comply with the Injunction” she had issued, but that CEO Tim Cook “ignored Schiller” and followed the advice of his CFO and finance team instead, adding that “Cook chose poorly.”
In this week’s Power On newsletter, Bloomberg’s Mark Gurman said out loud what many of us have already been thinking:
Ternus and services chief Eddy Cue want to make even more money from the App Store and figure out ways to raise margins and squeeze additional recurring revenue from the platform. Schiller, on the other hand, seems to believe that such moves will only further irk developers and governments. While there was no internal blowup or anything like that, it’s something he wanted no part of.
Mark Gurman
If this is accurate, and there’s no reason to doubt it considering that Schiller seems to have been the lone voice of reason even in the Tim Cook era, developers may be in for an even rockier ride when it comes to App Store policies. At the very least, it’s a safe bet that apps aren’t going to be getting any cheaper anytime soon, but if you’re hoping that the Ternus era would see a more open App Store, we wouldn’t recommend holding your breath.
