Apple’s plan to charge its users up to $20 for advanced artificial intelligence features has sparked discussions among analysts. The Cupertino giant aims to enhance the growth of its services business by introducing Apple Intelligence, its upcoming AI system, on some of its devices this year. The move is seen as a strategic approach to increase revenue and provide users with more personalized services.
According to Neil Shah, a partner at Counterpoint Research, investing in AI is expensive, and Apple is likely to pass on the cost to its users. By incorporating advanced AI features into its services, Apple can potentially charge a subscription fee to access premium apps. This aligns with Apple’s current subscription model, Apple One, which offers various services, including Apple Music, at a monthly cost of $19.95. Shah suggests that Apple could price Apple Intelligence between $10 and $20, making it part of the Apple One bundle for users seeking more sophisticated AI capabilities.
Apple’s services division generated $24.2 billion in revenue in the June quarter, highlighting the company’s successful monetization of software services. Unlike many hardware firms, Apple has effectively capitalized on the value-added services it offers, creating a precedent for charging users for premium features. Ben Wood, chief of research at CCS Insight, believes that Apple may opt to charge for advanced functionalities within its Apple Intelligence platform, further increasing its revenue stream.
Various technology firms, including OpenAI and Microsoft, charge for their AI offerings, emphasizing the value of advanced features. Samsung, Apple’s rival, has also introduced its AI services under the Galaxy AI brand and is exploring different revenue models for its software. By introducing Apple Intelligence, Apple aims to strengthen customer loyalty by providing personalized experiences that adapt to users’ behavior over time.
As AI becomes more integrated into everyday technology, subscription models for advanced features are becoming prevalent. Apple’s potential $20 monthly charge for advanced AI capabilities signifies a shift towards personalized and premium services, catering to users who seek enhanced functionalities. With the launch of Apple Intelligence, the company has an opportunity to offer bundled subscription services, delivering a range of services under a single price while maintaining revenue streams from individual product subscriptions.
Apple’s decision to introduce a subscription fee for advanced AI features reflects the changing landscape of technology services. By leveraging AI to enhance user experiences and generate additional revenue, Apple is positioning itself for long-term growth in the competitive tech industry. As AI continues to evolve, companies will need to adapt their business models to meet the rising demand for sophisticated and personalized services.