Tim Cook will step down as Apple's CEO later this year and be replaced by John Ternus, a senior vice president of hardware engineering, the technology company announced on Monday. 

Cook will become executive chairman of Apple's board of directors, replacing Arthur Levinson, the company said. Ternus, a 25-year Apple veteran, will assume the role of CEO on September 1, the company said.

"It has been the greatest privilege of my life to be the CEO of Apple and to have been trusted to lead such an extraordinary company," Cook said in a statement. "I love Apple with all of my being, and I am so grateful to have had the opportunity to work with a team of such ingenious, innovative, creative and deeply caring people who have been unwavering in their dedication to enriching the lives of our customers and creating the best products and services in the world." 

Cook also praised Ternus, saying he "has the mind of an engineer, the soul of an innovator, and the heart to lead with integrity and with honor."

"I am profoundly grateful for this opportunity to carry Apple's mission forward," Ternus said in a statement. "Having spent almost my entire career at Apple, I have been lucky to have worked under Steve Jobs and to have had Tim Cook as my mentor. It has been a privilege to help shape the products and experiences that have changed so much of how we interact with the world and with one another."

Cook, 65, succeeded Apple co-founder Steve Jobs as CEO in 2011. Over the course of his nearly 15 years at the helm of Apple, Cook has focused on launching and expanding services including Apple Pay, Apple TV and Apple Music, which generate more than $100 billion a year for the firm. Cook also oversaw the launches of new products including the Apple Watch and AirPods.

Big shoes

Apple's market value has surged roughly $3.6 trillion over the course of Cook's tenure as CEO.

"Ternus's name has been mentioned throughout the media over the last several months as the most likely Cook successor, so the fact he's getting the job won't be shocking to people (and the fact its Ternus instead of someone with more of a software background speaks to how Apple sees itself as a hardware-first organization)," Adam Crisafulli an equity analyst with Vital Knowledge, said in a note to investors. 

Yet Wedbush Securities technology analyst Dan Ives said Cook is leaving at a critical time for Apple.

"These will be big shoes to fill, and the timing of Cook exiting stage left as CEO could make sense but also creates questions," Ives said in a report. "Apple is making a major transition on its AI strategy, and longtime CEO and legendary Cook leaving now is a surprise."