Apple's next chief executive, John Ternus, has signaled that the company will not step back from its streaming ambitions. In an interview with Reuters, Ternus—currently Apple's hardware chief—said he intends to build on what he called the "tremendous momentum" of Apple TV+ when he takes over as CEO in September.
The comments offer a rare glimpse into the strategic priorities of Apple's incoming leadership. Ternus, who has overseen the development of the iPhone, iPad, and Mac chips, will inherit a company that has increasingly blurred the line between hardware and entertainment.
Apple TV+ as a Brand Builder
Apple launched its streaming service in 2019 with a focus on original programming, a departure from its traditional hardware-centric business model. Since then, Apple TV+ has earned critical acclaim with hits like "CODA" and "Ted Lasso," winning multiple Academy Awards and Emmys. But the service has remained a relatively small player in a market dominated by Netflix, Amazon Prime Video, and Disney+.
For Apple, the streaming service has never been just about subscriber numbers. The company has treated Apple TV+ as a brand-building tool, using high-quality content to deepen customer loyalty and create a halo effect around its ecosystem of devices and services. That approach appears to be continuing under Ternus.
Outgoing CEO Tim Cook, who has led Apple since 2011, described the company's entertainment strategy as being "the best" rather than "the most." He said he has been sharing that playbook with Ternus as part of the leadership handoff. Cook pointed to Apple's partnership with Formula 1 as a model for what Apple can uniquely add—exclusive, high-production-value content that ties into the company's broader brand identity.
What This Means for Investors
For everyday investors, the news underscores Apple's long-term bet on services as a growth driver. While the iPhone still accounts for the bulk of Apple's revenue, services—including Apple TV+, iCloud, Apple Music, and the App Store—have become an increasingly important and higher-margin part of the business. In the most recent fiscal year, Apple's services segment generated over $85 billion in revenue, up from about $46 billion five years ago.
Apple TV+ is a relatively small piece of that services pie, but its role as a brand differentiator could become more important as competition in streaming intensifies. The Formula 1 deal, for example, gives Apple exclusive access to a global sport with a passionate fan base, potentially driving new subscribers and boosting engagement across Apple's ecosystem.
Investors should also note that Ternus's commitment to Apple TV+ suggests continuity rather than a strategic pivot. That may reassure shareholders who were uncertain about the direction of the company after Cook's eventual departure. Ternus, a longtime Apple executive known for his work on hardware, is now signaling that he sees entertainment as a key part of Apple's future.
Broader Context
The streaming landscape has become increasingly crowded and expensive. Companies like Netflix and Disney have poured billions into content, while Apple has taken a more measured approach, focusing on quality over quantity. That strategy has helped Apple avoid the massive content spending that has weighed on competitors' profits.
Apple's balance sheet gives it the flexibility to continue investing in entertainment without putting pressure on its bottom line. The company holds more than $150 billion in cash and marketable securities, giving it ample room to pursue content deals and partnerships.
Still, Apple TV+ remains a niche player in terms of market share. According to industry estimates, the service accounts for less than 10% of the U.S. streaming market. But for Apple, the goal is not necessarily to be the biggest—it is to be the best, as Cook put it. That approach may limit Apple TV+'s revenue potential, but it also reduces the risk of a costly content arms race.
Looking Ahead
With Ternus set to take the helm in September, investors will be watching for more details on Apple's entertainment strategy. The Formula 1 partnership is a clear example of how Apple wants to differentiate itself, but it remains to be seen whether the company will pursue similar deals in other sports or genres.
For now, the message from Apple's leadership is clear: the company sees entertainment as a core part of its identity, and that is not changing anytime soon. For everyday investors, that means Apple's services business—and its potential to drive customer loyalty and recurring revenue—will remain a key part of the investment thesis.
