Apple’s Next Big Move: How AI Could Boost Revenue and User Experience
Apple is set to make a major move that could reshape its business once again. Since launching its first iPhone in 2007, Apple has led innovation in the smartphone market, starting with the introduction of touchscreen technology and internet access in a mobile device. Despite early competition with brands like Nokia, Apple quickly set itself apart. Fast forward to 2023, and Apple dominated smartphone sales, shipping 234.6 million iPhones and holding 20.1% of the global market.
Now, Apple is focusing on artificial intelligence (AI) to fuel its next growth phase. While Samsung entered the AI space earlier, Apple recently introduced “Apple Intelligence,” a suite of AI-powered tools designed to improve productivity and communication. With features like text summarization, intelligent voice assistance, and transcription, Apple Intelligence aims to give users more control and efficiency in their digital interactions.
Apple’s services segment, which includes iCloud, Apple Music, and Apple TV, generated $71 billion in revenue in the first nine months of 2024. Expanding Apple Intelligence to these offerings could boost this revenue even further, especially as Apple’s services have high profit margins, nearly double those of its product sales.
Analysts expect that Apple might add a subscription model to its Apple Intelligence tools, similar to Microsoft’s approach with Copilot, which charges users for access to premium AI features. If Apple charges between $10 and $20 monthly for advanced AI tools, the potential earnings could be substantial. With over 2.2 billion active Apple devices globally, and an estimated 300 million devices potentially needing upgrades, Apple is well-positioned to see increased sales and service subscriptions.
Apple Intelligence will initially be available on select models like the iPhone 15 Pro, iPhone 15 Pro Max, and future iPhone 16 devices, as well as M1-powered iPads and Macs. As demand grows for AI-compatible devices, Apple could see a boost in both device sales and services revenue.
If even a fraction of Apple’s user base subscribes to its AI services, Apple could generate billions monthly. This would not only strengthen Apple’s current $100 billion annual services revenue but also drive the company’s overall growth. With Apple Intelligence, the company’s journey toward AI integration is just beginning, and it may pave the way for significant advances in both hardware and digital services.