"Second in command" passes the baton! Apple Inc. (AAPL.US) senior management sees a major change of leadership.

Apple Inc. (AAPL.US) Chief Operating Officer Jeff Williams is set to retire, marking a significant management change for the iPhone maker during a turbulent period. Apple Inc. announced on Tuesday that Williams will step down from his role as COO this month and officially retire later this year. Before his departure, he will continue to lead the design team and be in charge of health projects. Sabih Khan will take over as COO, and the Apple Inc. design team will now report directly to CEO Cook. Khan, who has been with Apple Inc. for 30 years, joined the executive team in 2019 as Senior Vice President of Operations, taking over supply chain management including procurement and manufacturing. Reports from last year indicated that Apple Inc. had identified him as Williams' designated successor. Khan will continue to report to Cook, and may take on departments such as AppleCare under his leadership. After assuming his new role, Khan will face a series of challenges from tariff costs to slowing iPhone growth. Apple Inc. also faces global regulatory pressure and is lagging behind in the field of artificial intelligence (AI). Several startups focused on AI are reportedly developing hardware products that could potentially replace Apple Inc.'s iPhone, iPad, Mac devices. At 62 years old, Williams was previously seen as a potential successor to the 64-year-old Cook, but a small age gap and Williams' desire to retire earlier changed the company's plans. Reports suggest that John Ternus, Senior Vice President of Hardware Engineering, is now the most likely successor to Cook after his retirement. "He was obviously not the choice to replace Cook," said Bob Mansfield, former head of hardware engineering at Apple Inc., about Williams. "He's the same age as Cook, which doesn't make sense. The operations team at Apple Inc. will miss Jeff dearly." Williams joined Apple Inc. in 1998 and became COO in 2015. He is known for his work at IBM (IBM.US) in the 1980s, where he built a supply chain system that produced billions of devices annually and integrated thousands of suppliers worldwide. As Cook's right-hand man for over a decade, he led the supply chain management and engineering design of the Apple Watch, and oversaw the AppleCare customer service business. Williams has long been considered a core decision-maker at Apple Inc., and his departure is one of the most significant personnel changes in the company's history. "Jeff made a huge contribution to Apple Inc., though the public may not fully understand," said Tony Blevins, former Vice President of Operations at Apple Inc., who reported to Williams. "As a shareholder, I feel regret. Time is ruthless, and this legendary team is disbanding. His departure is a major loss." Apple Inc. has not specified who will take over the responsibilities of the Apple Watch engineering and health technology that Williams was in charge of. However, earlier this year, the company handed over hardware projects such as the Vision Pro headset and Siasun Robot & Automation to Ternus, while some software teams are now under the responsibility of software engineering head Craig Federighi. Cook stated in a release, "The exceptional team that Jeff built is his true legacy. While we will deeply miss him, he has entrusted the future business to outstanding talents." Mansfield added that with Williams' reach throughout the company, his successor will face challenges. Matthew Moore, former Operations Engineer at Apple Inc., said, "Sabih is essentially a clone of Cook. Jeff is more product-minded; Sabih is an operations expert just like Cook." Moore believes that Khan has already been running the operations team effectively, and the transition will be smooth, but other areas that Williams oversaw may face challenges. Former member of the health projects team, Myoung Cha, stated that Williams' "personal passion for health" deeply influenced the development of the Apple Watch, and that the team will deeply miss his leadership. This personnel change comes at a busy time for Apple Inc.'s operations department. Over the past few months, Apple Inc. has been shifting iPhone production from China to India to avoid tariffs. In the future, there may be further capacity shifts and the introduction of Siasun Robot & Automation technology in production. After assuming his new role, Khan will also have to address the challenges in AI development - just on Monday, Apple Inc.'s AI model leader was poached by Meta (META.US), and the company is considering enhancing its technology through external partnerships. At the same time, the EU is forcing changes to the App Store rules, and the US Department of Justice may terminate its lawsuit against Alphabet Inc. Class C (GOOGL.US) over a $20 billion annual revenue partnership. Unlike Williams, who often led Apple Watch events, Khan is known for being more low-key. After becoming COO, he might need to make more public appearances. Insiders predict that his deputy, Priya Balasubramaniam, will take on greater responsibilities in supply chain management. Williams' departure reflects a trend of turnover in Apple Inc.'s executive ranks. Last year, longtime CFO Luca Maestri transitioned to a less senior role, paving the way for retirement; former head of hardware engineering Dan Riccio is set to retire in 2024; marketing veteran Phil Schiller has been stepping back from the front lines since 2020; and design icon Jony Ive left to start his own business in 2019. With most executives close in age, internal sources had long anticipated a large-scale transition.