Apple’s AI features may cost as much as $20 per month

By Ajay Kumar Published August 8, 2024

Apple Intelligence is on the way to various compatible devices, but some of its advanced features may cost as much as $10 to $20 a month, according to analysts. The report comes from two analysts at Counterpoint Research who spoke with CNBC and speculated that the company could require an Apple One subscription for users to take advantage of the full suite of AI features.

According to Neil Shah, partner at Counterpoint Research, AI investments are expensive, and Apple will seek ways to pass the cost onto users. “Software and services make it more lucrative for Apple to pass it on with the Apple One subscription model,” Shah told CNBC in an interview.

Apple One is currently a subscription service that gives users access to up to six Apple subscriptions for a monthly price of $20. This includes Apple Music, Apple TV+, Apple Arcade, Apple Fitness+, Apple News+, and 2TB of storage with iCloud+. It would make sense for Apple to bundle Apple Intelligence services with this, potentially for an extra charge on top.

“Apple is one of the few connected devices companies that has successfully monetized the value-added services it offers,” said Ben Wood, chief of research at CCS Insight. “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.”

This would be a similar model used by other AI products offered by companies like OpenAI, Google, and Microsoft. You can use things like ChatGPT 3.5, Gemini, and Copilot for free, but the more advanced AI models and features like Gemini Advanced require a subscription. Notably, this also corresponds with earlier rumors that Apple would be charging for Apple Intelligence+.

Part of the idea behind this for all these companies is the need to offload some of the high costs of supporting these AI models. This includes the cost of research and development, server costs, and energy costs, which are outstripping the demand for both consumer and enterprise AI.

With even OpenAI operating at a loss, after having spent $8.5 billion on AI training and staffing, it remains to be seen if Apple is able to successfully monetize Apple Intelligence. If it is, it could be a model for the rest of the industry or it may simply be that Apple is uniquely placed to monetize these offerings compared with competitors due to its market position.