Apple (AAPL.US) or up to $20 to Apple Intelligence for more advanced AI features

Counterpoint Research partner Neil Shah said that Apple (AAPL.US) may charge up to $20 for its Apple Intelligence service to provide more advanced AI features. Mr Shah added that AI investments are expensive and Apple hopes to pass that cost onto users.

Mr Shah said that Apple hopes to promote the growth of its lucrative services business, and AI gives Apple the opportunity to further lock in its loyal customer base because Apple Intelligence will learn from user behavior to become more personalized.

Mr Shah said last week that software and services have helped Apple to earn more money from its Apple One subscription service. Apple One is a subscription service that bundles Apple Music, Apple TV+, Apple Arcade, iCloud+, News+ and Fitness+ together for $19.95 a month.

Apple's earnings report last week showed that its services revenue for the quarter was $24.2 billion, making it stand out from many other hardware companies that have failed to successfully monetize software. Ben Wood, research director at CCS Insight, said: "Apple is one of the few companies that have successfully monetized the services they provide on their connected devices." "So it sets a precedent for users that they have to pay for more advanced services. So, at a high level, you can't rule out Apple potentially charging for more advanced features in Apple Intelligence."

Mr Wood added that Apple Intelligence could allow Apple to bundle multiple services into a subscription service at a single price, "but similarly, Apple doesn't want to dilute revenue from individual product subscriptions."