iPhone 15 Pro phones are shown during a new product announcement on Apple’s campus … [+]
This story was updated on August 12 with new details about Apple Intelligence.
Apple is clear about the price of the Apple Intelligence AI features that will debut in the iPhone 16: it’s free. It remains to be seen how long they will be free or if the free comes with an asterisk.
said Neil Shah, partner at Counterpoint Research CNBC that Apple could charge between $10 and $20 per month for Apple Intelligence, possibly as part of its Apple One subscription service.
“Software and services make it more profitable for Apple to pass it on with the Apple One subscription model,” Shah explained.
AI is expensive to develop and maintain, and Shah is right to say that subscription revenue is too lucrative for tech companies to pass up. Google already charges $19.99 a month for access to its Google One AI Premium plan, which combines Gemini Advanced with 2 TB of cloud storage. UK subscribers also get free access to Nest Aware and Fitbit Premium.
ChatGPT has a premium tier, and Samsung has repeatedly warned users that Galaxy AI will only be free until 2025. The infrastructure is there for these companies to charge for access to their most advanced software. Considering the billions already spent on building these language models and the ongoing costs to maintain them, the money needs to be recouped.
But the question for these companies is whether the current output of AI tools is impressive enough to be locked behind a paywall? Looking at the current lineup of AI tools across all major smartphone manufacturers, I don’t think it is.
There’s no compelling case to pay extra for Writing Tools, Genmoji, audio transcription, web summaries, or a smarter Siri. The same goes for Galaxy AI and Gemini, which are helpful and enhance the smartphone experience. I often ask Gemini for a helping hand and am often impressed by their genetic image processing and call transcription.
But it’s not worth adding another direct debit to my current stack. I’m comfortable and experienced with smartphones that don’t have enough AI to work through FOMO.
That’s why I don’t think Apple will change its decision on charging for Apple Intelligence anytime soon, there’s no compelling case for it to do so. Artificial intelligence is the shiny new trend, but there are signs that people are losing trust in technology. Charging for previously free features could mean alienating people even more from the technology they already use.
There is also the game of chicken between Samsung, Google and Apple in AI tools. Whoever decides to put up the paywall first may face a public backlash, which will inform rival companies’ decisions. These AI features are also quite similar, so why should iPhone users pay to have their calls transcribed when Samsung users don’t have to?
Google has been providing free AI tools through its Pixel Feature Drop program since 2019, and I don’t think that will change anytime soon. The paid level of AI technology is for a very specific version of the Gemini language model that is more advanced. Or it will cost you extra if you want more Magic Editor cloud savings beyond the designed allowance of 10 per month.
However, daily AI-powered Pixel features remained free. Above all, skills like Call Screen and Photomoji may be AI-influenced, but ultimately they’re just more smartphone features.
Where will the line be drawn between a normal feature upgrade in a new OS update and what is paywalled because it’s “AI”? And how can this be done without alienating users who have already paid hundreds, or thousands, for premium hardware? In addition to the existing subscriptions they already have with this company.
Paywalled AI tools may make economic sense because it costs billions to build and maintain this technology, but implementing this plan is complicated. It will take a lot of development work to make these tools worth paying extra for, and then some convincing arguments as to why they shouldn’t be free.
There are many hurdles to jump before a set of paid AI capabilities becomes a reality. for this reason Apple Intelligence, Galaxy AI and Google AI will likely remain mostly free for the foreseeable future.
Update August 12: by Bloomberg Mark Gurman claims that Apple will make Apple Intelligence a key marketing point when the iPhone 16 is released. All iPhone 16 models will run the company’s AI toolset, which will also work on the iPhone 15 Pro versions. Apple spending its marketing budget to promote artificial intelligence is not surprising, given that it is the buzzword of the year and rivals have made exactly the same move.
Samsung led the way with Galaxy AI when it launched the Galaxy S24 this year. Google also teases that its AI features will play a huge role in the upcoming Pixel 9’s usability.
Samsung has built some goodwill by rolling out Galaxy AI on older devices, starting with the Galaxy S22. Bloomberg says Apple will do the same by rolling out AI tools to select handsets starting in 2023, but there’s no mention of older devices getting the same treatment.
In fact, Bloomberg claims at least 8GB of memory is needed to run Apple Intelligence, which rules out anything below the iPhone 15 Pro. This may change if less demanding operations can be performed on lower spec hardware. Samsung has released select AI tools on phones that can run them, for example the Galaxy S21 series only got Circle to Search. The Galaxy S22 series received almost all AI tools except for Instant Slow Mo, which requires more onboard processing power. Apple could follow a similar path if Apple Intelligence proves popular.
