Nandini Roy Choudhury, writer
Brief news
- Apple may impose an additional charge of up to $20 on users for its artificial intelligence capabilities as it aims to expand its services business.
- The forthcoming Apple Intelligence AI system will be implemented on a limited number of devices later this year, with a promise of a more powerful Siri voice assistant and autonomous email and image generation.
- Analysts suggest that Apple may implement a subscription model for its more sophisticated AI features, potentially including them in the Apple One subscription package for a fee of $10 to $20.
Detailed news
Analysts have informed CNBC that Apple may impose an additional charge of up to $20 on its users for its sophisticated artificial intelligence capabilities, as it endeavors to expand its lucrative services business.
Later this year, the Cupertino titan intends to implement Apple Intelligence, its forthcoming AI system, on a limited number of its devices.
Apple promised a more powerful Siri voice assistant and the capacity to autonomously generate emails and images when it unveiled its AI system in June. Analysts have suggested that Apple may implement a subscription model for its more sophisticated applications, despite the fact that these features will be implemented gradually and regions such as China and Europe will initially be excluded.
Neil Shah, a partner at Counterpoint Research, stated that Apple will seek to impose the cost of AI investment on its consumers, as it is costly.
In a recent interview with CNBC, Shah stated that the Apple One subscription model is more profitable for Apple when software and services are included.
Apple One is priced at $19.95 per month and provides consumers with access to a variety of Apple services, such as Apple Music.
Shah stated that Apple could conceivably include Apple Intelligence in Apple One, along with other premium AI features, for a fee of $10 to $20.
Apple’s services division generated $24.2 billion in revenue during the June quarter, which is distinctive in comparison to other hardware companies that have failed to capitalize on software.
Ben Wood, chief of research at CCS Insight, stated to CNBC this week that Apple is one of the few connected devices companies that has effectively monetized the value-added services it provides.
“As a consequence, it has established a precedent among its users that they must pay for additional premium services.” Given this, it is conceivable that Apple may opt to charge for more sophisticated features within its Apple Intelligence offering.
Wood also stated that Apple Intelligence could provide the U.S. corporation with the opportunity to introduce an integrated subscription service that offers a variety of services at a single price.
“However, Apple will be hesitant to reduce revenue from individual product subscriptions,” he added.
It is not uncommon for technology companies to charge for their AI offerings. For instance, OpenAI charges a subscription fee for its more sophisticated ChatGPT capabilities, while Microsoft does not.
charges for its AI Copilot utility.
Last month, Samsung’s mobile chief disclosed to CNBC that the company is still in the process of evaluating a variety of revenue models for its software, despite the fact that it has already initiated the deployment of its Galaxy AI artificial intelligence services.
Shah posits that Apple’s AI technology provides the company with an opportunity to further solidify its already loyal customer base by learning from a user’s behavior and becoming more personalized.
“The beauty of AI is that it learns about you as you use it more and more, and you become ensnared in the model itself because you are unable to transfer your own model from Apple to Android,” Shah explained.
“That is the point at which you begin to use it more frequently, and you become accustomed to it. This is the point at which Apple monetizes.”
