The iPhone 15 Pro phones are shown during a new product announcement at the Apple campus in … (+)
This story was updated on August 12 with new details from Apple Intelligence.
Apple is clear about the price of its Apple Intelligence AI features that will debut on the iPhone 16: they’re free. The question is how long they’ll be free, or if that free feature comes with an asterisk.
Neil Shah, partner at Counterpoint Research, said CNBC that Apple could charge between $10 and $20 per month for Apple Intelligence, potentially as part of the Apple One subscription service.
“Software and services make it more lucrative for Apple to pass them along with the Apple One subscription model,” Shah explained.
AI is expensive to develop and maintain, but Shah rightly argues that subscription revenue is far too lucrative for tech companies to afford to do without. Google already charges $19.99 per month for access to its Google One AI Premium plan, which bundles Gemini Advanced with 2TB 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. Given the billions already spent to create these language models and the ongoing cost of maintaining them, the money needs to be recouped.
But the question for these companies is whether the current range of AI tools is impressive enough to be locked behind a paywall? Looking at the current range of AI tools, across all the major smartphone manufacturers, I don’t think they are.
There’s no good reason to pay more for writing tools, Genmoji, audio transcription, web page summaries, or a smarter Siri. The same goes for Galaxy AI and Gemini, which are useful and enhance the smartphone experience. I often ask Gemini for a hand, and I’m often impressed by its generative image editing and call transcription.
But it’s not worth adding another automatic payment to my current stack. I’m comfortable and experienced enough with non-AI smartphones to get over the FOMO.
That’s why I don’t think Apple will change its decision to charge for Apple Intelligence anytime soon, there’s no compelling reason to do so. AI is the new big thing, but there are signs that people are losing trust in the technology. Charging for features that were previously free could mean further alienating people from the technology they were already turning away from.
There’s also the game of chicken between Samsung, Google, and Apple over AI tools. Whoever decides to put up the paywall first is likely to face a public backlash that will influence the decisions of rival companies. These AI features are also quite similar, so why would iPhone users pay to have their calls transcribed when Samsung users don’t have to?
Google has been offering free AI tools through its Pixel Feature Drop program since 2019, and I don’t think that’s going to change anytime soon. Its paid tier of AI tech is for a very specific version of the Gemini language model that’s more advanced. Or it’ll cost you more if you want to save more Magic Editor cloud backups outside of the 10-per-month allotment.
But the Pixel’s everyday AI-powered features have remained free. Above all, skills like Call Screen and Photomoji may be influenced by AI, but they’re ultimately just smartphone features.
Where will the line be drawn between a regular feature upgrade in a new OS update and what is paid for because it is AI? And how can this be done without alienating users who have already paid hundreds, if not thousands, for high-end hardware? On top of the existing subscriptions they already have with this company.
Paid AI tools may make financial sense because the technology costs billions of dollars to build and maintain, but implementing that plan is complex. It will take a lot of development work to make these tools worth paying for extra, and then a compelling case for why they shouldn’t be free.
There are several hurdles to overcome before a paid AI feature set becomes a reality, which is why Apple Intelligence, Galaxy AI, and Google AI will likely remain mostly free for the foreseeable future.
Updated August 12: Bloomberg Mark Gurman claims that Apple will make artificial intelligence a key marketing argument when it launches the iPhone 16. All iPhone 16 models will use the company’s AI tools, which will also run on the iPhone 15 Pro versions. The fact that Apple is spending its marketing budget on promoting artificial intelligence is no surprise, given that it’s the buzzword of the year and its competitors have been doing exactly the same thing.
Samsung launched the Galaxy S24 this year with AI. Google also announced that its AI features will play a big role in the usability of the upcoming Pixel 9.
Samsung has gained traction by rolling out Galaxy AI to older devices, going all the way back to the Galaxy S22. Bloomberg claims that Apple will follow suit by rolling out AI tools to select devices starting in 2023, but there’s no mention of older devices getting the same treatment.
In fact, Bloomberg claims that at least 8GB of memory is required to run Apple Intelligence, which rules out anything lower than the iPhone 15 Pro. That could change if less demanding features can be run on lower-spec hardware. Samsung has released some AI tools on phones that can run them, for example the Galaxy S21 series only got Circle to Search. The Galaxy S22 lineup got almost all of the AI tools except Instant Slow Mo, which requires more onboard processing power. Apple could follow a similar path if Apple Intelligence proves popular.
