Apple’s new AI features may not come cheap.
The Cupertino, California-based company may charge subscription fees of up to $20 to access some of its advanced artificial intelligence features when they finally roll out this fall. the analyst told CNBC..
“With software and services, it’s more profitable for Apple to pass that on through the Apple One subscription model,” said Neil Shah, partner at Counterpoint Research.
Apple already charges customers $19.95 a month for Apple One, a package that bundles up to six premium subscriptions, including Apple Music, Apple TV+ and Apple News+.
Shah told CNBC that the company could charge $10 to $20 for premium AI features, or even bundle them into Apple One for a higher price.
“Apple is one of the few connected device companies that has successfully generated revenue from the value-added services it offers,” Ben Wood, research director at CCS Insight, told CNBC.
“[It] “Apple has set a precedent for users that they will have to pay for more premium services. Given this, it is not impossible that Apple could choose to charge for more advanced features within its Apple Intelligence service,” Wood told CNBC.
The Post has reached out to Apple for comment.
According to technology consulting firm Future Processing, costs for AI start at $5,000 and can go up to well over $500,000 for cutting-edge development.
For big tech companies, the costs are even higher: Microsoft, Alphabet, Meta and Amazon are expected to spend more than $1 trillion on AI investments. According to Goldman Sachs.
OpenAI charges a subscription fee for advanced ChatGPT features. Microsoft sells Copilot Pro for $20 per month.is a more advanced, AI-powered version of the free Copilot program.
Apple announced new AI features at a conference in June.
The company opened its AI program to some software developers for testing in late July, but the public release has reportedly been delayed until October, weeks after Apple originally planned to make it available as part of the iOS 18 and iPadOS 18 releases.
Apple Intelligence includes improvements to Siri, helping the voice assistant better understand users’ questions and giving it access to personal information about users.
AI automatically creates summaries of text messages, voicemails, and emails, and also generates emojis and images.
Last week, Apple reported second-quarter services revenue of $24.21 billion, beating LSEG analysts’ expectations of $24.01 billion. The company expects its services division to continue growing at the same rate it reported over the past year, about 14%.
Apple Intelligence gives the company the opportunity to build an even more loyal customer base.
As customers use Apple Intelligence more frequently, more data is collected and it becomes more personalized, making it more difficult to move away from Apple Intelligence and preventing customers from transferring their AI to rival branded devices.
“The beauty of AI is [it] “Android is going to learn more and more about you, and you’re going to be locked into the model itself, because you can’t bring your own model from Apple to Android,” Shah told CNBC.
“So they start using it more and more, they get used to it, and Apple is successful in monetizing it.”
Rival Samsung has already started rolling out its own version of AI, Galaxy AI, to some of its devices.
Galaxy AI can automatically generate summaries of notes, translate live conversations, translate phone calls, etc. Samsung phones with Galaxy AI come equipped with cameras with auto-zoom capabilities.
Samsung is still considering different revenue models. the president of Samsung’s mobile division told CNBC last month.So it’s unclear whether the two companies will compete directly on AI subscriptions.
