August 08, 2024 – According to a report by CNBC, several analysts have predicted that Apple Inc. might charge up to $20 per month for its upcoming advanced artificial intelligence features. This move is expected to further boost the growth of its lucrative services business.
Apple is planning to introduce an artificial intelligence system called Apple Intelligence on some of its devices later this year. When announcing the system in June, the company promised enhancements to the Siri voice assistant and a range of new features, including the ability to automatically generate emails and images. Although these features will be rolled out gradually and may not be initially available in regions like China and Europe, analysts suggest that Apple might charge a subscription fee for more advanced applications.
Neil Shah, a partner at Counterpoint Research, stated that the investment in artificial intelligence is costly, and Apple intends to pass on some of these costs to users. “Software and services make it easier for Apple to transfer costs through the Apple One subscription model,” Shah explained.
Currently, Apple One costs 19.95permonth,allowinguserstoaccessvariousAppleservices,includingAppleMusic.ShahspeculatedthatApplemightchargeanadditional10 to $20 for more advanced AI features, possibly as part of the Apple One package.
In the second quarter, Apple’s services division generated $24.2 billion in revenue. “Apple is one of the few connected device companies that have successfully monetized value-added services,” said Ben Wood, Chief Research Officer at CCS Insight.
“Therefore, it has already set a precedent for users that they must pay for more advanced services. Based on this, it cannot be ruled out that Apple may choose to charge for more advanced features in its Apple Intelligence product,” Wood added. He suggested that Apple Intelligence could provide the US giant with options to introduce bundled subscription services that integrate various services under one price. However, he also acknowledged that Apple would be cautious about diluting the revenue from individual product subscriptions.
It’s not uncommon for technology companies to charge for their AI products. For instance, OpenAI charges a subscription fee for more advanced ChatGPT features, and Microsoft also charges for its AI Copilot tool.
Samsung, Apple’s biggest competitor, has already begun rolling out its artificial intelligence service called Galaxy AI. However, its mobile business head stated last month that the company is still considering various revenue models for its software.
Shah believes that artificial intelligence provides an opportunity for Apple to further lock in its already loyal customer base. This is because Apple Intelligence will learn from user behavior and become more personalized. “The beauty of artificial intelligence is that the more you use it, the more it understands you, and you become locked into this model because you can’t take your model from Apple to Android,” Shah explained. “This is where you start using it more and more, you get used to it, and that’s the key to Apple’s monetization.”
