Apple May Charge $20 for Certain AI Features. Getty Images
Apple is considering charging users up to $20 for its new advanced artificial intelligence features, according to analysts. This move aims to expand the company's already profitable services sector as it introduces its upcoming AI system, Apple Intelligence, later this year.
Announced in June, Apple Intelligence is set to enhance Siri, the company's voice assistant, and offer new capabilities such as automatically generating emails and images. However, these advanced features will be gradually rolled out, with regions like China and Europe potentially seeing a delay in access. Analysts suggest that Apple might implement a subscription fee for these premium AI features.
Neil Shah, a partner at Counterpoint Research, noted that the development and implementation of AI technology are costly. As such, Apple may look to offset these expenses by charging users. He speculated that Apple might incorporate this fee into its existing Apple One subscription service, which costs $19.95 per month and includes other Apple services like Apple Music. Shah estimated that the cost for Apple Intelligence could range from $10 to $20.
Apple’s services division, which generated $24.2 billion in the June quarter, has successfully turned software and services into a significant revenue stream. This is in contrast to many other hardware companies, which have struggled to monetize software effectively. Ben Wood, chief of research at CCS Insight, highlighted that Apple has set a precedent for users paying for premium services, suggesting it is plausible for the company to charge for advanced features within Apple Intelligence.
Wood also mentioned that Apple could bundle Apple Intelligence with other services under a single subscription. However, the company might be hesitant to dilute the revenue from individual product subscriptions.
Charging for AI features is not unusual in the tech industry. For instance, OpenAI has a subscription fee for its advanced ChatGPT features, and Microsoft charges for its AI Copilot tool. Samsung, Apple's major competitor, is also exploring different revenue models for its Galaxy AI services.
For Apple, AI represents an opportunity to deepen its connection with its loyal customer base. Apple Intelligence is designed to learn from user behaviour, providing a more personalized experience. Shah pointed out that the AI’s ability to adapt and learn over time could encourage users to become more engaged with the technology, making it difficult for them to switch to competitors’ products.
