AI Bulls Would Like Apple to Pretty-Please Keep AI Premium
Apple is poised to make AI tools on the level of Copilot and Gemini free next month, and AI bulls would really like them not to.
Companies with a focus on AI, specifically on Generative AI, are in trouble. The massive productivity improvements originally promised haven't materialized, are error-prone, and have made workers less productive and upset. Those productivity improvements have since been downplayed, and continually recast as coming just around the corner.
Meanwhile, the companies making bank on AI have been the consultants selling AI to other companies, and those companies who are providing the hardware and hosting to those producing models.
OpenAI is rapidly running out of money. In order for those companies that are selling the AI future to pull up from their nosedive they need everyone buying AI tools (the same AI tools that are increasingly disappointing from expectations) at increasing prices.
Apple is set to upset that particular apple cart this fall, with the release of Apple Intelligence that will provide refined versions of the (current) best use cases for AI we have today (speech to text, text to speech, transcripts, style re-writing, basic image generation, summarization) built into the OS and available for free.
It's going to be really hard to convince everyone to pay $20-50 a month for premium AI tools if what people want AI to do is built into their Mac and iPhone for free. Which makes it no shock we're starting to see a lot of articles suggesting that Apple charge $20 a month for their AI, too.
It's worth noting that none of these are officially sourced, and are usually framed as, "Analysts think Apple could charge $20 a month for these tools like other companies are charging for 'Premium' AI." I view this as an attempt by AI bulls to entice Apple not to disrupt their pricing model. For their own sake, they would prefer that Apple investors chase the service revenues that could be extracted under a Premium AI narrative.
I hope Apple doesn't bite, because this may be their best chance to move AI from a premium product that always is about to deliver on it's promises (but never quite getting there) into a free set of table-stakes tools that perform useful functions without the false hope. It also would help distance iOS from Android if powerful features are included in the purchase price in only one platform.
This is one apple cart I'd personally like to see upset; as it would begin to attach AI expectations and pricing solely to their current usefulness. We've been looking around the corner for over a year now at generative AI, but it's time to take stock of what we actually have and what it's worth.