Apple reportedly plans to turn some Apple Intelligence features into paid subscription services, and some analysts believe the company could charge users up to $20 per month for the privilege.
Last month, Bloomberg reporter Mark Gurman said that while Apple Intelligence will be free to start, Apple's long-term plan is to launch something like "Apple Intelligence+," with extra features that users pay monthly fees to access, similar to iCloud+.
Speaking to CNBC, Counterpoint Research's Neil Shah said Apple could offer the features as part of a modified Apple One subscription, and he believes an additional figure of between $10 and $20 is a realistic possibility.
"Software and services makes it more lucrative for Apple to pass it on with the Apple One subscription model," Shah told CNBC in an interview last week.
Apple One costs $19.95 a month and gives users access to various Apple services like Apple Music, Apple TV+, Apple Fitness+, additional cloud storage, and more.
"Apple is one of the few connected devices companies that has successfully monetized the value-added services it offers," Ben Wood, chief of research at CCS Insight, told CNBC.
"As a result, it has set a precedent with its users that they have to pay for more premium services. On this basis, it can't be ruled out that Apple may choose to charge for more advanced features within its Apple Intelligence offering."
Wood added that Apple Intelligence could give the company an option to launched a bundled subscription service with various services under a single price, akin to a new Apple One tier.
Apple in the June quarter saw a steep increase in services revenue at $24.2 billion, up from $21.2 billion a year ago and a new all-time revenue record. Analysts believe that making its own AI features another services revenue stream could allow Apple to compensate for the slower pace of hardware upgrades and also enable the company to pass the high cost of its investment in AI onto customers.
Apple has reportedly started building its own AI servers that use the M2 Ultra chip, and it is said to be developing its own AI server processor using TSMC's 3nm process for use as soon as 2025, which could enhance the performance of its data centers and future AI tools that rely on the cloud.
Apple is expected to spend several billion on hardware to support its artificial intelligence development in 2024, according to Apple analyst Ming-Chi Kuo. Kuo said he expects Apple to spend "at least" $620 million on servers in 2023 and $4.75 billion on servers in 2024.
Article Link: Would You Subscribe to Apple Intelligence? Analysts Say Some Features Could Cost Up to $20 Per Month
