John Ternus became chief executive of Apple on 1 September and presented his first product event last Wednesday. He inherits a company Tim Cook took from USD 108.2bn of revenue in fiscal 2011 to USD 416.2bn in fiscal 2025, from USD 25.9bn of net income to USD 112.0bn, and from roughly USD 347bn of market value to become the second most valuable company in the world at USD 4.8tn. Cook moves to executive chairman. Apple trades on more than 30 times next year’s earnings against 20 times for the index, and its earnings are growing more slowly than the market’s.
From 24 August 2011 to 8 September 2026 Apple returned 2,253% on price alone and 2,711% with dividends reinvested, against 551% and 758% for the index. The compounding was not smooth and it was not evenly distributed. Apple slightly lagged the index between the end of 2012 and the end of 2016, rising 52% against 57%, and it fell 27% in calendar 2022. Most of the outperformance arrived after 2019: the shares are eight times their end-2018 level, while the index has roughly trebled. Apple set a record close of USD 340.08 on 28 July this year.
Apple Share Price Development Under Tim Cook Relative to S&P 500 (2011 – 2026)
Source: Company data, InterCapital Research
Net income rose 4.3 times across the fifteen years and reached a record USD 112.0bn in fiscal 2025, after a dip in fiscal 2024 on a one-off European tax charge. The larger lever sits below the profit line. Diluted shares outstanding fell from 26.2bn on a split-adjusted basis in fiscal 2011 to 15.0bn in fiscal 2025, a reduction of 43%. Earnings per share therefore rose 7.6 times against net income’s 4.3 times, which means roughly a quarter of the per-share compounding came from retiring shares rather than from the operating business. Across the fifteen years Apple returned more than USD 1tn in dividends and buybacks.
Apple Net Income by Fiscal Year (2011 – 2025, USD bn)
Source: Company data, InterCapital Research
iPhone units went from 72.3m in fiscal 2011 to 231.2m in fiscal 2015, then stalled at 211.9m, 216.8m and 217.7m in the three years that followed. Apple withdrew unit disclosure after fiscal 2018. Volumes did keep climbing, to an estimated 255m to 260m this year, but that is 18% of growth in eight years against a tripling in the first seven. The rest came from price: the average selling price has gone from about USD 630 in Cook’s first full year to about USD 970 now, a 53% rise against consumer inflation of 47%. After 2015 Cook did not sell many more phones, he sold dearer ones.
iPhone Unit Sales by Fiscal Year (2011 – 2025, mn)
Source: Company data, InterCapital Research
iPhone was still 50.4% of revenue in fiscal 2025 and services 26.2%, so two lines are three quarters of the company. The others have barely compounded: iPad went from USD 19.2bn to USD 28.0bn and the Mac from USD 21.8bn to USD 33.7bn, while wearables, home and accessories peaked at USD 41.2bn in fiscal 2022 and has fallen for three years to USD 35.7bn. The Watch and AirPods, the two genuinely new products of the Cook era, sit inside the only segment now shrinking. The services line is where the economics are: gross margin on services runs above 75% against roughly 40% on devices, and more than USD 20bn a year of it is a single payment from Google for default search placement in Safari, which carries almost no cost at all.
Apple Revenue Breakdown by Category (2011 – 2025, USD bn)
Source: Company data, InterCapital Research
Ternus is the first engineer to run Apple since Steve Jobs. He joined the product design team in 2001, became vice-president of hardware engineering in 2013 and joined the executive team in 2021, so twenty-five years inside the company and thirteen running hardware. A mechanical engineer by training, he ran the organisation that shipped the iPad, AirPods, the Watch and the Mac’s move onto Apple’s own processors, the largest hardware programme of the Cook years. Cook came from operations and Jobs from product; Ternus comes from the bench. Apple has been a visible laggard in generative artificial intelligence, and the assistant it has just updated is better but still slower than its rivals, improved partly with Google technology behind it. The supply chain remains overwhelmingly Chinese, and Cook stays on to handle the politics that manages.
Ternus receives a USD 3m salary and a target equity award of USD 55m, three-quarters of it in performance shares that vest on Apple’s total shareholder return measured against the other companies in the index. Cook, as executive chairman, takes USD 2m and a USD 45m award weighted less heavily to relative performance. The structure is the message: Ternus is not paid to ride a rising market, he is paid to beat it, and the man he replaced beat it by roughly 1,700 percentage points.
The September event delivered the device and the price rise together. The iPhone Duo, the first foldable from Apple, a relatively late entrant to the foldable device market, starts at USD 1,999, opens from a 5.4-inch cover screen to a 7.6-inch inner display, runs the same A20 Pro silicon as the new Pro models and reaches shops on 23 October in more than 70 countries. Ternus called it the most transformational change to the iPhone since the original. The iPhone 18 Pro and Pro Max each rose USD 100, to USD 1,199 and USD 1,299, and Apple launched neither a base iPhone nor a second Air this cycle, so a new iPhone this autumn means a Pro or the Duo. The Watch and AirPods were refreshed alongside them.
Memory and storage inside an iPhone now cost roughly five times what they did last autumn, because the artificial-intelligence hyperscalers have absorbed the capacity Apple used to command, and the price increases are explicitly there to defend margin. The USD 100 on the Pro is less than that component inflation implies, so Apple is taking part of it on the chin. Ternus’s first act as chief executive, then, is the lever Cook pulled after 2015: a higher average selling price, on a foldable developed on Cook’s watch. What is left after that, a court ruling on App Store fees, an antitrust question over the Google payment, and a component market that no longer treats Apple as its most important customer, is not solved at a workbench.