Apple may want to monetize advanced Apple Intelligence features in the future

AppleInsider

Apple is considering a paid future for aspects of its Apple Intelligence service that would expand to a subscription model for additional features and more AI partners.

Future expansions to Apple Intelligence may involve more AI partners, paid subscriptions

The introduction of Apple Intelligence has offered a wealth of AI features at no cost for owners of the top iPhone 15 models. However, as Apple Intelligence expands to more services and more partners, a subscription model for some offerings could be ahead.

A new report from Bloomberg has speculated that Apple intends to charge extra for future additional capabilities within Apple Intelligence. This expansion would follow the model -- and could even be part of -- the existing iCloud+ service.

In addition to a potential subscription for certain advanced Apple Intelligence capabilities, the company has already positioned itself to get a cut of subscriptions it generates for the paid levels of OpenAI's ChatGPT and other third-party AI services.

Currently, the company offers free and anonymous access to OpenAI's GPT-4o technology without setting up a ChatGPT account. The agreement with Apple also prevents OpenAI from using data from Apple users' queries to train its technology.

Apple has made the option of passing a query on to ChatGPT available in Apple Intelligence if the scope of the query is outside the built-in models' parameters. This would include requests requiring specialized knowledge, such as medical or legal databases, or larger queries that are not part of the on-device Large Language Models (LLMs).

Apple has been said to be in talks with other AI providers to potentially offer additional outside options. These partners might work with Apple to offer pro-level subscriptions to Apple Intelligence users in the future.

There is currently no timetable for the introduction of any additional paid features, assuming the report is accurate. Apple is likely to limit any subscription opportunities until a larger set of users have iPhones and other devices that can run Apple Intelligence, which would develop over the next several years.

Rumor Score: Possible

Read on AppleInsider

araquen

I am skeptical. Apple Intelligence is not a product, and everyone gets that wrong. Apple Intelligence is functionality that is intended to enhance and improve the various platforms Apple has (macOS, iOS, iPadOS, etc). How do you monetize that without monetizing the OS? An OS Apple offers for free.

I highly doubt Apple will start charging again for their OS, just to monetize Apple Intelligence. Rather, what Apple is more likely to do is use Apple Intelligence to enhance the user experience for services. Perhaps “Enhanced AppleTV+” or “Enhanced AppleMusic” where the AI infrastructure is used to enhance the users’ experiences on those services. And I am on the fence about charging for that extra functionality. If Apple boosts prices for their services, it would be for far more than just “look it has AI now."

At the end of the day, it is easy to predict how Apple is going to do something once you understand that Apple is a hardware manufacturer first and foremost. Their goal is to have you buy their devices, originally the Mac. Even the iPhone was originally intended to be a supplement to the Mac, and Apple shifted gears when the iPhone proved to be as widely popular as it had become. But regardless of device - Apple wants to sell you their hardware. And they want to justify the premium consumers pay. So EVERYTHING ELSE Apple does is intended to be a value-add to make it worthwhile to have invested in Apple’s hardware. Everything. Mail. Messages. Pages. FaceTime. Numbers. Keynote. AppleMusic. Apple Arcade. iCloud. AppleOne. All the software and services are there to give your Mac, your iPad, your iPhone something to do without being dependent on the “kindness of strangers.” Because Apple hasn’t forgotten (nor have long-time Mac users), there was a time where developers were cheerfully refusing to develop for Apple offerings.

People call it “walled garden” but that assumes an even playing field. For decades, Apple has been on the periphery of popular tech, and barely anyone was developing for the Mac. The iPhone was largely developed because prior to that, not a single cell phone manufacturer would provide interoperability between their devices and the Mac (and I loved my Motorola flip phone, but its lack of connectivity to my Mac was a royal pain in my ***). The iPhone was the first cell phone Mac users could sync with their computer. From that point, Apple’s offerings remain consistent with: how do we (Apple) provide solutions that extend the efficacy of the products our customers already own? How do we keep improving the value of our brand to our consumers?

Apple’s goal isn’t to sell us an Apple Intelligence product. That’s Google’s world. Apple’s goal is to use Apple Intelligence as the infrastructural foundation for having Apple solutioning a “personal digital assistant” for their customers. That isn’t a product. It is core functionality of the hardware and software systems Apple provides.

But pundits (especially those driven by the limited vision of Wall Street) can’t understand this, so keep getting it wrong.

Trust me. Once you start looking at Apple as a hardware manufacturer first and foremost, whose business model is based on the idea of providing a boutique experience for their customers (who have paid a premium for such treatment) you’ll have a better understanding on how Apple intends to leverage its software and services solutions.

lam92103

Ofcourse. Why else do you think investors are shoveling billions into AI & GPUs?

DAalseth

Oh good, ANOTHER reason to turn as much of that s**t off that I can.

shrave10

araquen said:

I am skeptical. Apple Intelligence is not a product, and everyone gets that wrong. Apple Intelligence is functionality that is intended to enhance and improve the various platforms Apple has (macOS, iOS, iPadOS, etc). How do you monetize that without monetizing the OS? An OS Apple offers for free.

Bundling AI features as part of the OS encourages antitrust zealots like Vestegier to force Apple to give it away for free to third party developers who already enjoy making $ billions off of the Apple ecosystem for free.  Separating advanced features of Apple Intelligence out of the OS and as an optional add-on allows Apple to charge these rich freeloader developers without violating the DMA in EU or similar potential actions in other countries.  

blastdoor

I think it is highly likely that Apple will charge for premium apple intelligence services. If nothing else, they could charge developers or other pro users for training models on ACDC. 

Many people think Apple can’t possibly compete with Nvidia but it’s actually Nvidia that can’t possibly compete with Apple. Nvidia just looks impressive because their main competitors have been AMD and Intel. Apple has the ability to build and optimize a full stack solution like nobody else. When Apple deploys those capabilities in the model training space they will blow away the competition. People will be delighted to pay Apple to train models on ACDC. 

Another reason I think Apple will charge for AI services is that it’s part of the strategy to become less dependent on China. The more of apples revenue that comes from services, the smaller the disruption if Xi does something stupid. Making their products last as long as possible also helps with that strategy. 

chasm

blastdoor said:

Another reason I think Apple will charge for AI services is that it’s part of the strategy to become less dependent on China. The more of apples revenue that comes from services, the smaller the disruption if Xi does something stupid. Making their products last as long as possible also helps with that strategy. 

I agree, Apple's drive to make its devices last longer will ultimately result in relatively fewer hardware sales, which means that revenue has to be made up for elsewhere. I trust Apple not to go overboard on subscription madness, but looking at the things they do charge subscriptions for (such as iCloud+ and Apple TV+), it's all a good value for money IMO so I have some trust that they'll try to keep the subscription features affordable.

22july2013

The simplest way for Apple to charge for Apple's AI is to include it as part of the Apple One service package.

dewme

As long as AI delivers much more value than what it costs anything is possible. This includes AI that enhances the value of the products it’s running on, whether under the hood or in our faces, or AI that delivers capabilities that are not otherwise possible. 

I don’t know of many businesses that give away anything that costs them money to develop and deliver. They’re going to find a way to not only cover their costs but create another revenue stream. 

The costs incurred to develop under the hood AI will be covered by increasing the price on products that have it. 

As far as Apple charging for enhanced AI, it’s really not a stretch at all to see that coming. After all, Apple “gives away” a limited amount of iCloud storage for free but charges a subscription for greater storage options. 

Subscriptions aren’t going away anytime soon. 

I’m optimistic about AI but despite the massive hype it’s still unproven to me. When I see people or groups getting their panties in a twist around rumors of Apple withholding AI from them I shake my head because it’s still TBD whether any AI will be useful for the general population of computer users. 

When Siri was announced it was exciting and did good demo, but after more than 10 years of availability, I rarely use it. If Apple Intelligence and AI in general surpasses Siri, I’ll call it a win. We’ll see. 

mattinoz

With enough capacity why wouldn’t private cloud computing lend itself to a host of computing tasks that developers could use to off load from the users device. Long running tasks. High memory tasks that return much lighter products even tasks that stream the user a feed of content?

charge in various ways like allowing developers to bundle a typical amount of usage for an increased cut of subscription revenue. 

Apple uses disassembly of recycled devices to continuously build replacement processors nodes in the PCC while recycling the rest of the hardware. 

danvm

blastdoor said:

I think it is highly likely that Apple will charge for premium apple intelligence services. If nothing else, they could charge developers or other pro users for training models on ACDC. 

Many people think Apple can’t possibly compete with Nvidia but it’s actually Nvidia that can’t possibly compete with Apple. Nvidia just looks impressive because their main competitors have been AMD and Intel. Apple has the ability to build and optimize a full stack solution like nobody else. When Apple deploys those capabilities in the model training space they will blow away the competition. People will be delighted to pay Apple to train models on ACDC. 

Another reason I think Apple will charge for AI services is that it’s part of the strategy to become less dependent on China. The more of apples revenue that comes from services, the smaller the disruption if Xi does something stupid. Making their products last as long as possible also helps with that strategy. 

After reading the article, I believe Apple will be competing with Microsoft Copilot and Google Gemini, rather than Nvidia. Nvidia's AI business is more centered around data centers rather than end-users. I assume Apple will concentrate on their customer base, primarily iOS/iPadOS users, while Microsoft will be the first option in the business and enterprise sector, and Google will target Android users.

blastdoor

danvm said:

blastdoor said:

I think it is highly likely that Apple will charge for premium apple intelligence services. If nothing else, they could charge developers or other pro users for training models on ACDC. 

Many people think Apple can’t possibly compete with Nvidia but it’s actually Nvidia that can’t possibly compete with Apple. Nvidia just looks impressive because their main competitors have been AMD and Intel. Apple has the ability to build and optimize a full stack solution like nobody else. When Apple deploys those capabilities in the model training space they will blow away the competition. People will be delighted to pay Apple to train models on ACDC. 

Another reason I think Apple will charge for AI services is that it’s part of the strategy to become less dependent on China. The more of apples revenue that comes from services, the smaller the disruption if Xi does something stupid. Making their products last as long as possible also helps with that strategy. 

After reading the article, I believe Apple will be competing with Microsoft Copilot and Google Gemini, rather than Nvidia. Nvidia's AI business is more centered around data centers rather than end-users. I assume Apple will concentrate on their customer base, primarily iOS/iPadOS users, while Microsoft will be the first option in the business and enterprise sector, and Google will target Android users.

The competition I’m referring to is Apple silicon + software vs Nvidia silicon plus CUDA. 

If Apple relies on their own hardware and software rather than Nvidia’s, that’s competition. If Apple takes business away from Nvidia’s customers, that’s also competition. 

It’s similar to how the M series of chips competes with Intel. The competition isn’t direct, but it’s there and it’s significant. 

avon b7

shrave10 said:

araquen said:

I am skeptical. Apple Intelligence is not a product, and everyone gets that wrong. Apple Intelligence is functionality that is intended to enhance and improve the various platforms Apple has (macOS, iOS, iPadOS, etc). How do you monetize that without monetizing the OS? An OS Apple offers for free.

Bundling AI features as part of the OS encourages antitrust zealots like Vestegier to force Apple to give it away for free to third party developers who already enjoy making $ billions off of the Apple ecosystem for free.  Separating advanced features of Apple Intelligence out of the OS and as an optional add-on allows Apple to charge these rich freeloader developers without violating the DMA in EU or similar potential actions in other countries.  

There is zero issue with Apple trying to monetise whatever it wants as long as it doesn't involve abusing a dominant position, stifling competition or attempt to tip the playing field in its position. That applies to anyone in a similar situation. 

Then it will be up to users to decide. 

danvm

blastdoor said:

danvm said:

blastdoor said:

I think it is highly likely that Apple will charge for premium apple intelligence services. If nothing else, they could charge developers or other pro users for training models on ACDC. 

Many people think Apple can’t possibly compete with Nvidia but it’s actually Nvidia that can’t possibly compete with Apple. Nvidia just looks impressive because their main competitors have been AMD and Intel. Apple has the ability to build and optimize a full stack solution like nobody else. When Apple deploys those capabilities in the model training space they will blow away the competition. People will be delighted to pay Apple to train models on ACDC. 

Another reason I think Apple will charge for AI services is that it’s part of the strategy to become less dependent on China. The more of apples revenue that comes from services, the smaller the disruption if Xi does something stupid. Making their products last as long as possible also helps with that strategy. 

After reading the article, I believe Apple will be competing with Microsoft Copilot and Google Gemini, rather than Nvidia. Nvidia's AI business is more centered around data centers rather than end-users. I assume Apple will concentrate on their customer base, primarily iOS/iPadOS users, while Microsoft will be the first option in the business and enterprise sector, and Google will target Android users.

The competition I’m referring to is Apple silicon + software vs Nvidia silicon plus CUDA. 

If Apple relies on their own hardware and software rather than Nvidia’s, that’s competition. If Apple takes business away from Nvidia’s customers, that’s also competition. 

It’s similar to how the M series of chips competes with Intel. The competition isn’t direct, but it’s there and it’s significant. 

I believe that Nvidia's competition will come from its current major customers: Microsoft, Amazon, and Google. All three are developing their own AI chips—Maia/Cobalt, Graviton, and Axion.  These chips could replace Nvidia in these companies datacenters.

Maybe Apple could compete indirectly with Nvidia, but I think I don't think it has the same impact as other companies.  

9secondkox2

Trying to monetize every little thing is the way of everyone else. 

With apple, ML/AI is simply part of the OS. 

This ends the confusion and fragmentation. It combines all of the strengths into one incredible product. 

ITS A DIFFERENTIATOR. 

heck, Apple is paying open ai in some way right now so we don’t have to until they have their own generator finished. 

If AI is a growth vector for apple, they will kill its potential by charging people who already bought in - again. 

That would just plain suck. 

And apple doesn’t do that kind of used car salesman, cable company, shady streaming platform (sorry you can’t watch that particular movie unless you buy a more expensive plan) crap.  

9secondkox2

shrave10 said:

araquen said:

I am skeptical. Apple Intelligence is not a product, and everyone gets that wrong. Apple Intelligence is functionality that is intended to enhance and improve the various platforms Apple has (macOS, iOS, iPadOS, etc). How do you monetize that without monetizing the OS? An OS Apple offers for free.

Bundling AI features as part of the OS encourages antitrust zealots like Vestegier to force Apple to give it away for free to third party developers who already enjoy making $ billions off of the Apple ecosystem for free.  Separating advanced features of Apple Intelligence out of the OS and as an optional add-on allows Apple to charge these rich freeloader developers without violating the DMA in EU or similar potential actions in other countries.  

That may be why apples has noted the small issues. If ai ever does come to the eu, it will require either concessions from Europe or apple will offer a lite version. Or it will be an eu only separate, paid for app. And no one can argue with that since you can already get alternative ai apps on the App Store.

mikethemartian

I wouldn’t be surprised if they started moving the OS itself as a subscription service,

blastdoor

danvm said:

blastdoor said:

danvm said:

blastdoor said:

I think it is highly likely that Apple will charge for premium apple intelligence services. If nothing else, they could charge developers or other pro users for training models on ACDC. 

Many people think Apple can’t possibly compete with Nvidia but it’s actually Nvidia that can’t possibly compete with Apple. Nvidia just looks impressive because their main competitors have been AMD and Intel. Apple has the ability to build and optimize a full stack solution like nobody else. When Apple deploys those capabilities in the model training space they will blow away the competition. People will be delighted to pay Apple to train models on ACDC. 

Another reason I think Apple will charge for AI services is that it’s part of the strategy to become less dependent on China. The more of apples revenue that comes from services, the smaller the disruption if Xi does something stupid. Making their products last as long as possible also helps with that strategy. 

After reading the article, I believe Apple will be competing with Microsoft Copilot and Google Gemini, rather than Nvidia. Nvidia's AI business is more centered around data centers rather than end-users. I assume Apple will concentrate on their customer base, primarily iOS/iPadOS users, while Microsoft will be the first option in the business and enterprise sector, and Google will target Android users.

The competition I’m referring to is Apple silicon + software vs Nvidia silicon plus CUDA. 

If Apple relies on their own hardware and software rather than Nvidia’s, that’s competition. If Apple takes business away from Nvidia’s customers, that’s also competition. 

It’s similar to how the M series of chips competes with Intel. The competition isn’t direct, but it’s there and it’s significant. 

I believe that Nvidia's competition will come from its current major customers: Microsoft, Amazon, and Google. All three are developing their own AI chips—Maia/Cobalt, Graviton, and Axion.  These chips could replace Nvidia in these companies datacenters.

Maybe Apple could compete indirectly with Nvidia, but I think I don't think it has the same impact as other companies.  

I agree those are also competitors for Nvidia.

shrave10

avon b7 said:

shrave10 said:

Bundling AI features as part of the OS encourages antitrust zealots like Vestegier to force Apple to give it away for free to third party developers who already enjoy making $ billions off of the Apple ecosystem for free.  Separating advanced features of Apple Intelligence out of the OS and as an optional add-on allows Apple to charge these rich freeloader developers without violating the DMA in EU or similar potential actions in other countries.  

There is zero issue with Apple trying to monetise whatever it wants as long as it doesn't involve abusing a dominant position, stifling competition or attempt to tip the playing field in its position. That applies to anyone in a similar situation. 

Then it will be up to users to decide. 

Having devices work together in an ecosystem enhances productivity.  Like you said, the user can decide whether they want to pay more for being in the Apple ecosystem or not.  They can always choose Android if they don't like it.  It's not the EU's job to decide when there is no monopoly on smartphones.  The only thing the EU will get by allowing third parties on iPhones and Android phones is probably that Apple and Google may have to charge more for smartphones sold in EU than other regions.  Smartphones in EU will essentially need to be subsidized by their consumers rather than the rich third party developers.  The only thing the EU will accomplish is to make the rich third party developers who already make $ billions even richer leaving their consumers to pick up the tab.  They may even get more ads in first party apps on their phones and need to cough up more money to remove them.  Let's see what the EU consumers think of Ms. Vestegier then.  Of course Epic and Spotify will be laughing all the way to the bank with the EU consumers' cash

radarthekat

araquen said:

I am skeptical. Apple Intelligence is not a product, and everyone gets that wrong. Apple Intelligence is functionality that is intended to enhance and improve the various platforms Apple has (macOS, iOS, iPadOS, etc). How do you monetize that without monetizing the OS? An OS Apple offers for free.

I highly doubt Apple will start charging again for their OS, just to monetize Apple Intelligence. Rather, what Apple is more likely to do is use Apple Intelligence to enhance the user experience for services. Perhaps “Enhanced AppleTV+” or “Enhanced AppleMusic” where the AI infrastructure is used to enhance the users’ experiences on those services. And I am on the fence about charging for that extra functionality. If Apple boosts prices for their services, it would be for far more than just “look it has AI now."

At the end of the day, it is easy to predict how Apple is going to do something once you understand that Apple is a hardware manufacturer first and foremost. Their goal is to have you buy their devices, originally the Mac. Even the iPhone was originally intended to be a supplement to the Mac, and Apple shifted gears when the iPhone proved to be as widely popular as it had become. But regardless of device - Apple wants to sell you their hardware. And they want to justify the premium consumers pay. So EVERYTHING ELSE Apple does is intended to be a value-add to make it worthwhile to have invested in Apple’s hardware. Everything. Mail. Messages. Pages. FaceTime. Numbers. Keynote. AppleMusic. Apple Arcade. iCloud. AppleOne. All the software and services are there to give your Mac, your iPad, your iPhone something to do without being dependent on the “kindness of strangers.” Because Apple hasn’t forgotten (nor have long-time Mac users), there was a time where developers were cheerfully refusing to develop for Apple offerings.

People call it “walled garden” but that assumes an even playing field. For decades, Apple has been on the periphery of popular tech, and barely anyone was developing for the Mac. The iPhone was largely developed because prior to that, not a single cell phone manufacturer would provide interoperability between their devices and the Mac (and I loved my Motorola flip phone, but its lack of connectivity to my Mac was a royal pain in my ***). The iPhone was the first cell phone Mac users could sync with their computer. From that point, Apple’s offerings remain consistent with: how do we (Apple) provide solutions that extend the efficacy of the products our customers already own? How do we keep improving the value of our brand to our consumers?

Apple’s goal isn’t to sell us an Apple Intelligence product. That’s Google’s world. Apple’s goal is to use Apple Intelligence as the infrastructural foundation for having Apple solutioning a “personal digital assistant” for their customers. That isn’t a product. It is core functionality of the hardware and software systems Apple provides.

But pundits (especially those driven by the limited vision of Wall Street) can’t understand this, so keep getting it wrong.

Trust me. Once you start looking at Apple as a hardware manufacturer first and foremost, whose business model is based on the idea of providing a boutique experience for their customers (who have paid a premium for such treatment) you’ll have a better understanding on how Apple intends to leverage its software and services solutions.

Perhaps a good analogy would be the free Apple workout app and exercise rings versus the Apple Firness+ app.  So it’s maybe not an extra cost on top of an already paid subscription service like your Apple TV example, but rather a new paid service that goes beyond what’s available in the free Apple Intelligence capabilities.  I could see an app for medical professionals, maybe partnering with IBM Watson, or an app for sports trainers, etc. 

mattinoz

radarthekat said:

araquen said:

I am skeptical. Apple Intelligence is not a product, and everyone gets that wrong. Apple Intelligence is functionality that is intended to enhance and improve the various platforms Apple has (macOS, iOS, iPadOS, etc). How do you monetize that without monetizing the OS? An OS Apple offers for free.

I highly doubt Apple will start charging again for their OS, just to monetize Apple Intelligence. Rather, what Apple is more likely to do is use Apple Intelligence to enhance the user experience for services. Perhaps “Enhanced AppleTV+” or “Enhanced AppleMusic” where the AI infrastructure is used to enhance the users’ experiences on those services. And I am on the fence about charging for that extra functionality. If Apple boosts prices for their services, it would be for far more than just “look it has AI now."

At the end of the day, it is easy to predict how Apple is going to do something once you understand that Apple is a hardware manufacturer first and foremost. Their goal is to have you buy their devices, originally the Mac. Even the iPhone was originally intended to be a supplement to the Mac, and Apple shifted gears when the iPhone proved to be as widely popular as it had become. But regardless of device - Apple wants to sell you their hardware. And they want to justify the premium consumers pay. So EVERYTHING ELSE Apple does is intended to be a value-add to make it worthwhile to have invested in Apple’s hardware. Everything. Mail. Messages. Pages. FaceTime. Numbers. Keynote. AppleMusic. Apple Arcade. iCloud. AppleOne. All the software and services are there to give your Mac, your iPad, your iPhone something to do without being dependent on the “kindness of strangers.” Because Apple hasn’t forgotten (nor have long-time Mac users), there was a time where developers were cheerfully refusing to develop for Apple offerings.

People call it “walled garden” but that assumes an even playing field. For decades, Apple has been on the periphery of popular tech, and barely anyone was developing for the Mac. The iPhone was largely developed because prior to that, not a single cell phone manufacturer would provide interoperability between their devices and the Mac (and I loved my Motorola flip phone, but its lack of connectivity to my Mac was a royal pain in my ***). The iPhone was the first cell phone Mac users could sync with their computer. From that point, Apple’s offerings remain consistent with: how do we (Apple) provide solutions that extend the efficacy of the products our customers already own? How do we keep improving the value of our brand to our consumers?

Apple’s goal isn’t to sell us an Apple Intelligence product. That’s Google’s world. Apple’s goal is to use Apple Intelligence as the infrastructural foundation for having Apple solutioning a “personal digital assistant” for their customers. That isn’t a product. It is core functionality of the hardware and software systems Apple provides.

But pundits (especially those driven by the limited vision of Wall Street) can’t understand this, so keep getting it wrong.

Trust me. Once you start looking at Apple as a hardware manufacturer first and foremost, whose business model is based on the idea of providing a boutique experience for their customers (who have paid a premium for such treatment) you’ll have a better understanding on how Apple intends to leverage its software and services solutions.

Perhaps a good analogy would be the free Apple workout app and exercise rings versus the Apple Firness+ app.  So it’s maybe not an extra cost on top of an already paid subscription service like your Apple TV example, but rather a new paid service that goes beyond what’s available in the free Apple Intelligence capabilities.  I could see an app for medical professionals, maybe partnering with IBM Watson, or an app for sports trainers, etc. 

thing about the walled garden Apple doesn’t need to cultivate all the plants, make all furniture or even the windows that might go in the walls.  They can but don’t have they make most of their money selling the walls letting you enjoy that you want more space inside the walls.