There’s no subscription fee for it for now

Before Apple unveiled Apple Intelligence at WWDC 2024, I said Apple AI should generally be free to iPhone users, laying out all the reasons why Apple can’t afford to charge a subscription fee for the service. I did mention one exception that would have me gladly pay for AI access: A smarter Siri that works across devices and acts as a true assistant capable of controlling computers for me.

Apple then confirmed at WWDC that Apple Intelligence will be available for free via the iOS 18, iPadOS 18, and macOS 15 updates, with a big caveat on the iPhone front. You’ll need an iPhone 15 Pro/Max or later to get Apple Intelligence features. The cost of hardware was one of the reasons I cited when I said Apple Intelligence should be free.

A new report indicates that Apple is indeed looking to make money from Apple Intelligence features in the future. The path isn’t immediately clear, however. Options could include charging a subscription for some Apple Intelligence features and getting a cut of subscription revenue from third-party AI service providers like OpenAI and Google.

The details come from Mark Gurman’s Power On newsletter. The Bloomberg reporter speculates that Apple Intelligence can be a source of revenue growth for Apple now that people are upgrading to new iPhones less frequently.

Software and services could help Apple compensate for the slower pace of hardware upgrades. That’s where Apple Intelligence might come in at some point in the future. Gurman says that Apple’s long-term plan is to make money from its AI products. It’s unclear how Apple will do it, however.

Gurman explains that Apple might launch an Apple Intelligence Plus subscription that includes premium AI features. The other option is getting a cut of the subscription revenue from every AI partner it brings to the iPhone:

There’s an opportunity to turn AI features and other software into paid services, but it will take time. Though Apple Intelligence will be free to start, the long-term plan is to make money off the capabilities. The company could eventually launch something like “Apple Intelligence+” — with extra features that users pay monthly fees for, just like iCloud. On top of that, Apple will get a cut of the subscription revenue from every AI partner that it brings onboard.

The report doesn’t offer details on which AI features Apple might place behind a paywall.

Also, Gurman doesn’t mention other revenue-sharing deals between Apple and AI service providers. But history has proven Apple’s ability to monetize the iPhone. The default search deal Apple has in place with Google brought Apple as much as $20 billion in revenue in 2022.

Siri gets an AI-powered upgrade in iOS 18.
Siri gets an AI-powered upgrade in iOS 18. Image source: Apple Inc.

As for the AI partners Apple is considering for chatbot service in iOS 18, we only have OpenAI’s ChatGPT for now. Access to ChatGPT will be free for the user, which is something Apple confirmed at WWDC.

Reports that followed revealed there’s no monetary agreement between Apple and OpenAI for ChatGPT at this point. Apple is “paying” OpenAI by potentially directing a large number of new users to ChatGPT. OpenAI can hope to convince some of them to pay for the Plus subscription. Any subscriptions coming from the iPhone, iPad, or Mac app might generate revenue for Apple.

Apple is also considering other chatbots. The company confirmed as much at WWDC without naming any other products.

Gurman says that Apple might announce a new partner as soon as this fall. Google’s Gemini seems like a likely addition to Apple Intelligence. Gurman expects it to happen this fall. Claude’s Anthropic is another potential ChatGPT alternative that might find its way to iOS 18.

The report mentions Meta AI as the kind of chatbot Apple doesn’t want on iPhone. It’s not just about Meta’s privacy practices that Apple has always criticized. Apple also believes that OpenAI, Google, and Anthropic offer superior products.

There’s a lot of speculation here. But it sure looks like it’ll be a while before we’ll have to consider buying an Apple Intelligence Plus subscription. Meanwhile, many people interested in Apple Intelligence, including this longtime iPhone user, will need a new iPhone this fall to run Apple’s new AI features.

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