NEW YORK, July 1: In a strategic move aimed at diversifying its revenue sources beyond hardware sales, Apple is gearing up to introduce paid artificial intelligence (AI) features under a new initiative called "Apple Intelligence," as reported by Bloomberg's Mark Gurman in his latest Power On newsletter.

Initially set to offer basic AI functionalities for free, Apple's long-term strategy includes the launch of a premium tier, potentially named "Apple Intelligence+." This subscription service will grant users access to enhanced AI capabilities for a monthly fee, akin to the existing iCloud+ model.

Gurman suggests that Apple's decision to monetize AI services aligns with a broader goal of mitigating the impact of slower hardware upgrade cycles on its financial performance. By leveraging AI as a recurring revenue stream, Apple aims to reduce its dependency on hardware innovations to sustain business growth.

Moreover, Apple anticipates generating additional revenue through partnerships with AI providers like Google and Anthropic. These collaborations are expected to enable Apple to integrate advanced AI functionalities into its ecosystem, enhancing user experience across devices such as iPhones, iPads, and Macs. The partnership with Google, in particular, is slated for announcement alongside the debut of Apple Intelligence in the fall, coinciding with the releases of iOS 18, iPadOS 18, and macOS Sequoia.

Interestingly, Bloomberg previously disclosed that Apple declined a potential AI collaboration with Meta, citing concerns over data privacy. Conversely, Apple is actively exploring partnership opportunities tailored for the Chinese market, where certain AI services, including ChatGPT, are not readily accessible.

As Apple prepares to roll out its AI initiative later this year, industry observers are keenly watching how these developments will impact both consumer engagement and Apple's financial performance in the evolving landscape of artificial intelligence and digital services.