Apple is expected to charge users between $10 and $20 for access to its new advanced artificial intelligence features, according to analysts. This move comes as the tech giant prepares to launch its AI system, Apple Intelligence, later this year, aiming to enhance its already lucrative services business.

What to Expect from Apple Intelligence

• AI Features: Apple Intelligence will bring enhanced capabilities to devices, including an improved Siri voice assistant, automatic email generation, and image creation.
• Regional Rollout: The rollout will be gradual, with some regions, such as China and Europe, not receiving access initially.
• Potential Costs: Analysts suggest that Apple could integrate these advanced AI features into its Apple One subscription, which currently costs $19.95 per month. The AI enhancements could add an extra $10 to $20 to the subscription price.

Analyst Insights

• Neil Shah, Counterpoint Research: Shah notes that investing in AI is costly, and Apple will likely pass these costs onto users, possibly through its Apple One subscription model.
• Ben Wood, CCS Insight: Wood highlights that Apple has successfully monetized its value-added services, setting a precedent for charging users for premium features. He also suggests that Apple Intelligence could be bundled with other services under a single subscription price, although Apple may be cautious about diluting revenue from individual product subscriptions.

AI in the Tech Industry

Charging for AI services is becoming increasingly common in the tech industry. For instance, OpenAI charges for advanced ChatGPT features, and Microsoft offers its AI Copilot tool at a premium. Apple’s main competitor, Samsung, is also exploring various revenue models for its AI services, known as Galaxy AI.

Locking in Loyalty

Apple’s AI advancements are expected to further solidify customer loyalty. The AI system will learn from user behavior, making the experience more personalized and difficult to replicate on other platforms, such as Android. This personalization could lead to increased usage and, consequently, more opportunities for Apple to monetize its AI features.

As Apple continues to innovate and expand its service offerings, the introduction of Apple Intelligence represents a significant step in the company’s strategy to boost its revenue through advanced technology and premium services.

Apple has revised its policy in the European Union to comply with new tech regulations following a charge from the European Commission. The updated policy, effective Thursday, will allow developers to engage with customers outside the App Store.

Key Changes

• New Communication Rules: Developers can now promote offers and communicate with users directly within their apps, beyond just linking to their own websites.
• Introduction of Fees: Apple will implement two new fees:
  • 5% Acquisition Fee: Charged for new users.
  • 10% Store Services Fee: Applied to sales made on any platform within 12 months of the app’s installation.

These new fees will replace the previously reduced commission rates for digital goods and services sold through the App Store.

Industry Reactions

• Spotify’s Response: Spotify, which has had ongoing disputes with Apple over in-app linking, is reviewing the changes. A Spotify spokesperson criticized the high fees as being inconsistent with the Digital Markets Act’s requirements.
• EU Commission’s Stance: The Commission, which criticized Apple’s previous fees, will evaluate the new compliance measures and consider feedback from developers. This charge is the first under the Digital Markets Act, which targets Big Tech’s market power and could lead to significant fines.

Background

The European Commission charged Apple in June for breaching tech rules by restricting how developers could interact with their users. The Digital Markets Act aims to curb the influence of major tech companies like Apple by enforcing stricter regulations and promoting fairer competition.