Let’s dive into some forecasts. Besides the iPhone, Apple’s most lucrative category is its Services. The company’s strategy in modern artificial intelligence, coupled with its history of acquisitions, suggests Apple could unlock new revenue opportunities in 2025. Apple Intelligence stands to become the next significant contributor to Services revenue.
What Makes Apple Intelligence Worth Paying For?
In the near term, the demand for Apple Intelligence will be closely linked to hardware upgrades, as it will only be available on certain device models:
• iPhone: Compatible with iPhone 15 Pro, iPhone 16, iPhone 16 Pro (2023 models and later)
• iPad: Available on M-series iPad Pro (2021 and later), M-series iPad Air (2022 and beyond), A17 Pro iPad mini (2024)
• Mac: Usable on M-series Macs (from 2020 and onwards)
This poses a strong incentive for users who might not otherwise consider upgrading their devices.
Looking forward, there is potential for Apple Intelligence to enhance forthcoming hardware like Apple Vision Pro, Apple Watch, and HomePod. Additionally, Apple’s anticipated smart display for home use could also benefit from this integration, further encouraging purchases.
So, how might Apple generate revenue from Apple Intelligence once it becomes widespread across their hardware? A straightforward approach would be to place a selection of advanced features behind a paywall.
Broadening Model Integrations
Currently, I subscribe to OpenAI’s ChatGPT for $20 a month and find it highly valuable. This month, I’m also exploring Anthropic’s Claude at the same price point. While I haven’t decided on keeping both subscriptions, each model offers a distinctive experience that could persuade me.
Apple has two promising avenues to monetize Apple Intelligence. It’s likely that they earn a commission on ChatGPT subscriptions purchased via the Apple Intelligence interface on iPhone, iPad, and Mac.
Apple has also shown interest in incorporating Google’s Gemini into Apple Intelligence. Adding more models could lead to increased revenue. The potential release of the Gemini iPhone application may hasten these discussions.
Why stop there? My favorite audio transcription app, MacWhisper, integrates with OpenAI, Anthropic, Google, and various other providers such as:
• Groq
• xAI
• Azure
• Ollama
• LM Studio
• Custom providers
Apple Intelligence is structured to allow Siri’s capabilities to expand by connecting with third-party AI services seamlessly. This framework allows Apple to enjoy both a share of subscription revenues and enhanced service offerings—a mutually beneficial scenario.
Introducing Apple Chat
The essential takeaway: Apple has the capacity to embrace both strategies. With its resources, Apple could transform Apple Intelligence into a platform that features a standalone chatbot, akin to ChatGPT or Claude. A chatbot would be an excellent feature to secure behind a paywall, enabling Apple to capture 100% of subscription revenues instead of merely a 30% share. Even better, Apple could pursue both options.
If executed effectively, I’d seriously contemplate switching to a more privacy-centric, integrated chatbot from Apple, especially when compared to the limited personal knowledge offerings of OpenAI or Anthropic. Siri is set to unveil a basic version soon, with enhanced personal request functionalities already planned. However, a comprehensive Apple chatbot rivaling ChatGPT should also be on the way.
Additional AI Features
Beyond large language models, Apple is already leveraging its AI technology for features like Clean Up in photo editing. While similar tools have existed on other platforms for some time, it’s understandable why Apple hasn’t monetized this yet—it forms part of the fundamental feature set that delineates Apple Intelligence.
In the future, Apple may place advanced photo editing capabilities—such as background replacement, motion blur reduction, de-reflection, object removal, and realistic content-aware fills—behind a paywall. Essentially, any advanced feature that users currently subscribe for in Photoshop could potentially become part of Apple’s offering.
Additionally, consider Apple’s recent acquisition of Pixelmator, one of the top Photoshop alternatives for iPhone, iPad, and Mac. This acquisition hints at a subscription-based professional image editor that surpasses what Aperture provided over ten years ago. It lays the groundwork for a new photo editing platform and supplementary paid AI-driven photo features.
In Summary
Apple Intelligence holds promise for driving hardware upgrades in the short term. The integration of third-party AI services opens up new revenue possibilities, while the introduction of an Apple chatbot and premium AI features could help Apple offset the costs associated with operating Apple Intelligence and generate significant income in the coming years.
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