Apple could charge up to $20 for its advanced AI features, according to analysts, as the company aims to expand its lucrative services business. Later this year, the tech giant plans to launch Apple Intelligence, its upcoming AI system, across select devices.
Announced in June, Apple Intelligence promises enhancements like a more powerful Siri, along with features that can automatically generate emails and images. However, these features will roll out gradually, with regions such as China and Europe initially excluded. Analysts suggest Apple may introduce a subscription model for its premium AI applications.
Neil Shah, partner at Counterpoint Research, highlighted the significant investment required for AI, suggesting that Apple will likely pass these costs onto users. “Software and services make it more profitable for Apple to integrate this into the Apple One subscription model,” Shah explained.
Currently priced at $19.95 per month, Apple One provides access to several Apple services, including Apple Music. Shah believes Apple could charge an additional $10 to $20 for Apple Intelligence, possibly as part of the Apple One package.
Apple’s services division generated $24.2 billion in revenue in the June quarter, a notable success compared to other hardware companies that struggle to monetize software. Ben Wood, Chief of Research at CCS Insight, noted that Apple has set a precedent for charging for premium services, making it plausible that the company may require payment for advanced AI features.
Wood also mentioned that Apple Intelligence could lead to a bundled subscription service, offering multiple services under a single price. However, Apple may hesitate to dilute revenue from individual product subscriptions.
Charging for AI services isn’t new in the tech world. Companies like OpenAI and Microsoft already offer premium AI tools for a fee. Meanwhile, Samsung, Apple’s main competitor, is exploring various revenue models for its Galaxy AI services.
For Apple, AI presents an opportunity to deepen customer loyalty. According to Shah, Apple Intelligence will learn from users’ behavior, creating a more personalized experience that makes it difficult for users to switch to other platforms.
The beauty of AI is that the more you use it, the more it learns about you, making it hard to switch to another model,” Shah said. “This is where Apple’s monetization strategy will truly shine.
