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Apple may charge $20 for AI features, analysts say

Apple AI
Translate from : Apple kan opkræve $20 for AI-funktioner, siger analytikere
AI investments are expensive, and Apple wants to pass on the cost. With the Apple One subscription model, Apple can introduce premium AI features. This could lock customers into their ecosystem.
By Maria
8 aug. 2024 10:35 am
f

The investment in artificial intelligence (AI) isn't cheap, and Apple may be looking to pass that cost on to its users, according to Neil Shah, partner at Counterpoint Research.

"Software and services makes it more profitable for Apple to charge those costs through the Apple One subscription model," Shah told CNBC in an interview last week. Apple One costs $19.95 per month and gives users access to various Apple services, including Apple Music. Shah said Apple could charge between $10 and $20 for Apple Intelligence, potentially as part of the Apple One, for more advanced AI features.

Apple's services division earned $24.2 billion in the June quarter, making it unique in that many other hardware companies have failed to monetize their software.

"Apple is one of the few companies in connected devices that has successfully monetized the value-added services they offer," Ben Wood, head of research at CCS Insight, told CNBC this week. "On this basis, it cannot be ruled out that Apple may choose to charge for more advanced features within its Apple Intelligence offering."

Wood added that Apple Intelligence could allow the US giant to launch a bundled subscription service with different services under one price. "But Apple will also be reluctant to dilute the revenue from individual product subscriptions," he said. It's not unusual for tech companies to charge for their AI offerings. OpenAI has e.g. a subscription fee for more advanced ChatGPT features, and Microsoft charges for its AI Copilot tool.

According to Shah, AI gives Apple a chance to further bond their already loyal customer base. Apple Intelligence will learn from a user's behavior and become more personalized. "The beauty of AI is that the more you use it, the more it learns about you, and you become more and more tied to the model because you can't take your own model from Apple to Android," Shah said. “That's where you start using it more and more and you get more and more used to it and that's where Apple can monetize.

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