In recent months, two major updates featuring Apple Intelligence have rolled out through iOS 18.1 and iOS 18.2. Speculation has arisen about potential paid AI services from Apple; however, CEO Tim Cook recently stated that the concept of charging for these features has never even been on the agenda. Here’s the reasoning behind it.
Apple perceives AI as akin to multitouch
Steven Levy from WIRED had a conversation with Tim Cook about AI and other topics. A particular statement from Cook has resonated with me since the interview was published earlier this month.
Levy: Some companies impose charges for AI-enhanced services. Did that ever cross your mind?
Cook: We’ve never discussed charging for it. We see it as a foundational technology, similar to multitouch, which was pivotal for the smartphone and modern tablet innovations.
According to the CEO, Apple has ‘never discussed’ the idea of monetizing AI features.
This perspective is noteworthy, framing AI as an essential technological advancement comparable to multitouch and beyond.
Moreover, this mindset emphasizes a significant distinction between Apple and its competitors in the AI domain.
I believe this distinction underscores a critical reason why monetization hasn’t emerged as a priority for Apple.
Hardware continues to be Apple’s primary revenue generator, supporting all other endeavors
When multitouch was introduced with the original iPhone, it was indeed a complimentary feature, but it was inherently linked to a newly launched, premium product.
Apple Intelligence operates on a similar premise.
While Apple doesn’t charge users for AI capabilities, accessing these features requires purchasing a compatible iPhone, iPad, or Mac first.
In contrast to most other AI entities, Apple has established its core business upon hardware sales.
Although the company’s services segment is expanding, the majority of its revenue is still derived from hardware sales, with iPhone revenue standing out distinctly.
Thus, while Apple Intelligence is technically part of iOS 18.1 and iOS 18.2 at no additional cost, this is only possible because Apple has first sold you an iPhone.
Tim Cook recognizes this reality.
Apple can afford to offer AI features at no extra charge, as the company continues to prosper by selling new iPhones.
What are your thoughts on Tim Cook’s remarks? Share your perspective in the comments.
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