![](\"https:\/\/www.thestreet.com\/.image\/NDA6MDAwMDAwMDAzMjMxOTE0\/apples-new-iphone-18-goes-on-sale-in-london-stores.jpg?profile=rss\")
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A friend of mine recently bought an iPhone 17 and told me he was most excited about Siri. Though people like my wife are primarily in it for the camera, he wanted to see how much the assistant could do without opening another app.<\/p>\n
However, having seen my wife deal with her fair share of iPhone annoyances, I was more concerned about whether using those new AI features would eventually cost extra.<\/p>\n
It’s a reasonable concern. Buying the phone is only the beginning of many people’s Apple bills. Cloud storage, music, and other services can quietly turn a one-time purchase into an ongoing monthly expense.<\/p>\n
Now Apple (AAPL) is giving iPhone users another reason to examine that bill.<\/p>\n
During the company’s Nov. 2 earnings call, CEO John Ternus said some server-powered AI features, including Siri AI and intelligent photo editing, will have usage limits. Customers who need more capacity will be able to pay for expanded access in the future.<\/p>\n
Apple hasn’t announced the price. But the possibility raises a major question about what owning an iPhone really includes.<\/p>\n
Apple CEO says some Siri AI features will have usage limits <\/p>\n
Apple CEO John Ternus gave iPhone users a lot to think about during the company’s Nov. 2 earnings call.<\/p>\n
Goldman Sachs analyst Michael Ng asked about iCloud+ and whether Apple’s growing AI capabilities could create new opportunities to generate subscription revenue.<\/p>\n
Ternus confirmed that some of those features won’t offer unlimited access.<\/p>\n
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“There’s going to be some usage limits on features that rely on server-side models, which include Siri AI and intelligent photo editing and some other things like that,” he said.<\/p>\n
He then explained what happens when customers need more.<\/p>\n
“And so anyone who needs greater capacity will be able to purchase expanded access in the future.”<\/p>\n
In practical terms, iPhone owners will be able to use eligible AI features, but certain cloud-powered requests will incur usage limits. Customers who want more capacity will have the option to pay for it, as previously laid out in a September support document.<\/p>\n
For instance, Google offers a glimpse of how this could work. Its $19.99-a-month AI Pro plan provides four times the usage allowance of free Gemini while expanding the context window from 32,000 to 1 million tokens, enabling it to handle much longer conversations and documents.<\/p>\n
Ternus pointed out that iCloud subscriptions originally focused on storage, but Apple has gradually added entertainment and other services. That said, Apple hasn’t announced future pricing or specific Siri AI request allowances.<\/p>\n
Arguably, that’s where the challenge begins: convincing customers that another recurring expense is worth it.<\/p>\n
Apple CEO announces a surprising strategic shift for future iPhone users worldwide.<\/p>\n
Bloomberg \/ Getty Images<\/p>\n
Apple’s AI plan faces a major subscription problem <\/p>\n
Apple already knows how to turn an iPhone purchase into a monthly expense.<\/p>\n
In the U.S., iCloud+ costs $2.99 a month for 200GB of storage or $9.99 for 2TB. Apple One’s Individual bundle runs $21.95 monthly. Each payment may seem modest, but subscriptions add up quickly.<\/p>\n
That said, users are questioning the value for money as they are with AI tools in general. In a January 2025 discussion on r\/apple about iCloud storage tiers, Reddit user u\/tempest_fiend complained: “That way people either have to use less than they need, or they pay for more than they need.”<\/p>\n
An October Deloitte survey found that subscribing households spend an average of $76 a month on streaming services, up 9% from a year earlier. Some 45% said streaming already costs too much, while about half were looking for ways to reduce those bills.<\/p>\n
Convincing people to pay for smartphone AI could be even harder.<\/p>\n
A 2025 CNET survey conducted by YouGov found that 50% of U.S. smartphone owners were unwilling to pay extra for AI features, but clearly it isn’t a prediction of how many people will eventually buy expanded Siri access.<\/p>\n
Apple, however, sees an opportunity to offer more than storage.<\/p>\n
As CEO John Ternus put it, “in the beginning, iCloud tiers were largely about storage, but we’ve been adding more capabilities and features to it.”<\/p>\n
In addition, CFO Kevan Parekh explained that requests handled directly on an iPhone are highly efficient. But “on the server side, we would have some inference costs,” he told analysts.<\/p>\n
Those costs come from running AI models in data centers whenever a request needs more computing power than the phone can provide.<\/p>\n
What paid Siri AI access means for iPhone users and Apple stock<\/p>\n
For iPhone owners, the biggest questions remain unanswered. <\/p>\n
How many advanced Siri requests will be included? What will extra capacity cost? And will existing iCloud+ subscriptions be enough?<\/p>\n
Nonetheless, for investors, the opportunity is substantial.<\/p>\n
Apple generated a whopping $31.6 billion in services revenue during the September quarter, with a 76% gross margin, according to an SEC filing. It also reported more than 1.5 billion paid subscriptions across its ecosystem and over 2.5 billion active devices.<\/p>\n
That’s a tremendous audience for additional services, although those figures don’t represent unique paying customers.<\/p>\n
The challenge is profitability.<\/p>\n
Parekh acknowledged that server-based AI requests carry computing costs. Apple also expects company-wide gross margin to decline to 45% to 46% in the December quarter, mainly because of higher memory prices.<\/p>\n
For shareholders, additional AI subscriptions could strengthen Apple’s recurring revenue business. But that depends on something simpler, which is whether iPhone owners find expanded Siri access useful enough to justify another monthly expense.<\/p>\n
Until Apple reveals its prices and allowances, that remains an open question.<\/p>\n
Related: Jim Cramer explains the ‘AI cheat code’ driving Apple stock higher<\/p>\n
#Apple #CEO #signals #surprising #change #iPhone #users<\/p>\n","protected":false},"excerpt":{"rendered":"
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