In recent months, significant advancements in Apple Intelligence have been introduced with iOS 18.1 and iOS 18.2. Although some speculate about potential paid AI services from Apple in the future, CEO Tim Cook has stated that monetization has never even been considered. Here’s the reasoning behind this standpoint.
Apple perceives AI as ‘similar to multitouch’
In a recent interview with Steven Levy from WIRED, Tim Cook shared insights about AI and related topics. A particular quote from that interview has resonated with me since its publication earlier this month.
Levy: Some companies charge for AI-enhanced services. Have you considered this?
Cook: We have never discussed charging for it. We see it as akin to multitouch, which played a crucial role in the smartphone revolution and the advent of modern tablets.
According to the CEO, Apple has reportedly ‘never discussed’ the possibility of charging for AI features.
This rationale is noteworthy, placing AI as a foundational technology reminiscent of multitouch and similar innovations.
Moreover, it underscores a significant contrast between Apple and its AI competitors.
This distinction, in my view, hints at an even more crucial reason why Apple has not considered financial gains from AI.
Hardware continues to be Apple’s main revenue source, supporting all other company activities
When multitouch was introduced on the first iPhone, it was indeed offered as a complimentary feature; however, it was intrinsically linked to a premium new device.
Apple Intelligence operates on a similar principle.
While Apple is not charging for AI, access to Apple Intelligence is contingent upon owning a compatible iPhone, iPad, or Mac.
Unlike most other AI companies, Apple’s business model is fundamentally built around hardware.
Although the company is expanding its services division, the majority of its revenue is still derived from hardware sales, with iPhone sales leading the charge.
Therefore, while Apple Intelligence is technically free with iOS 18.1 and 18.2, this is only because Apple has already sold you an iPhone.
And Tim Cook is acutely aware of this fact.
Apple can afford to provide AI features at no additional cost because their sales of new iPhones continue to thrive.
What are your thoughts on Tim Cook’s comments? Share your opinions in the comments section.
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