[비즈한국] With growing speculation that Samsung Electronics005930's Galaxy AI features may become paid services in the future, attention is focused on the company's future strategic direction, especially as rumors of "permanent free access" have also surfaced. Since last year, Samsung Electronics has specified in the notices for its Galaxy AI-supported product lines that "Galaxy AI features will be provided for free until 2025," but the company has yet to disclose any concrete plans beyond that.
AI, which has emerged as a core competitive edge for smartphones, is seen as a potential revenue model for smartphone manufacturers like Samsung and Apple. While analysts suggest that a shift to paid services is inevitable due to cost concerns, the problem lies in consumer resistance. It remains to be seen whether buyers of expensive smartphones are willing to pay extra for AI features, which are being marketed as essential technology. Critics also point out that if the AI features do not offer clear differentiation from existing functions or other AI services, it could lead to a decline in market appeal.
Only 6 months left until Samsung Galaxy AI becomes a "paid service"?
Interest in the market is rising as various speculations emerge regarding the possibility of Samsung Galaxy AI moving to a paid model. When Samsung Electronics unveiled Galaxy AI last year, it notified users that it would only guarantee free access until the end of this year. This followed a press release regarding the operation of the "Galaxy Experience Space" distributed to the global market early last year, as well as a footnote in the support device detail pages stating, "Galaxy AI features will be provided for free until 2025 on supported Samsung Galaxy devices. Different terms may apply to AI features provided by third parties." The same applies to the latest product lineups, including the S24 series, the S25 series—which markets the popularization of "AI phones"—the Galaxy Z6 series, Galaxy Watch Ultra, and Galaxy Buds3 Pro.
Other speculations have also surfaced. A Chinese IT tipster, PandaFlashX, stated via X (formerly Twitter) on the 19th (local time) that "All Galaxy AI features, excluding Gemini, such as generative editing, real-time call translation, and writing tools, will be provided for free permanently." The suggestion is that, aside from Google's premium plans, the services will remain available without additional costs, just as they are now.
Foreign media are also paying close attention to Samsung Electronics' AI pricing strategy, as they view this issue as directly linked to the possibility of a business model shift for the entire smartphone industry. It has been consistently suggested that Apple may also make its "Apple Intelligence" AI system a paid service. According to reports from CNBC and others, a subscription fee of up to $20 (approximately 27,000 won) per month has been discussed. Apple is currently in the process of rebuilding core functions like "Siri," which was previously expected to integrate with ChatGPT, after receiving criticism that it is lagging behind in AI innovation.
Although a tentative deadline for free services was provided from the time of Galaxy AI's launch, the company has yet to disclose whether it will actually transition to a paid model or what the specific details would be. A Samsung Electronics official stated, "Nothing has been decided regarding the monetization of Galaxy AI."
Behind the 'paywall': Operational costs and service monetization
For smartphone manufacturers, AI represents more than just an element to strengthen market competitiveness; it holds potential as a long-term, new revenue model. In a situation where replacement cycles are lengthening and profit growth from hardware sales alone is slowing down, converting the AI features embedded in the devices into a subscription model could improve service-based monetization.
Market research firm Counterpoint Research analyzed the possibility of Apple Intelligence transitioning to a paid model, stating, "Considering Apple's past precedents, it is highly likely." The interpretation is that, unlike the hardware sector where seasonal factors are pronounced, the services sector generates stable profits based on subscriptions, leaving significant room for the monetization of AI services.
The reason discussions on monetization have gained momentum less than two years after the launch of AI phones lies in the high operational costs associated with cloud-based AI services. While local on-device AI features embedded in terminals do not incur additional operational costs, they have limits in computational processing and are mainly used for relatively simple functions. Conversely, high-end functions with high utility in daily life mostly rely on large-scale APIs through cloud servers, which lead to continuous server infrastructure maintenance costs, API call fees, and licensing costs from technology partnerships. This is the direct and realistic background behind the consideration of "partial monetization" or a shift to subscription models.
Shim Woo-joong, a specialist researcher at the Korea Institute for Industrial Economics & Trade, said, "It is difficult to price AI in advance, and consumers can only accept the cost burden after experiencing the utility themselves." He added, "Unlike companies like Google and Apple that generate stable software revenue through their own platforms or stores, Samsung has a manufacturing-centered business structure. The relative difficulty in covering operational costs and building an AI service revenue model will likely influence the monetization discussion."
Samsung Electronics has pursued an "open platform" strategy that presupposes integration with external generative AI models from the initial planning stage, rather than implementing all functions solely through on-device AI. The intention is to increase functional diversity and market response speed through collaborations with major AI partners like Google and Microsoft. At the same time, it is interpreted that the company's limitations as a manufacturer in terms of independent LLM (Large Language Model) development capabilities and cloud infrastructure have also played a role.
Kim Yong-hee, a professor at the Graduate School of Media and Communication at Kyung Hee University, said, "Because it must connect to external AI, it is difficult to bear the operational costs, so it is inevitably headed toward monetization in the long term. There may also be an expectation of additional revenue by quickly instilling the image that AI is a paid service."
"Wasn't it supposed to be an AI phone without conditions?" Persuading users is key
In January last year, Roh Tae-moon, head of Samsung Electronics' MX Business (President), mentioned at a press conference for the Galaxy S24 Unpack event, "AI is now in the beginning stages, so we are not currently reviewing monetization." However, he added, "If AI becomes very advanced and requires far more resources than it does now, some customers will want 'high performance' even if they have to pay for it."
The fact that consumer perception is improving is interpreted as a positive signal. According to a Morgan Stanley survey, U.S. iPhone users are willing to pay an average of up to $9.11 (approximately 13,000 won) per month for unlimited access to Apple Intelligence. This is an 11% increase compared to a survey from last September.
As Samsung Electronics has positioned Galaxy AI as a core competitive edge for its latest flagship series and emphasizes its "AI smartphone" strategy, maintaining consumer trust is also pointed out as an important task. If the company lures buyers with core AI functions and then shifts policy to impose separate charges, it could face criticism for "unilateral service restrictions."
The critique is that while the company focused on marketing effects, it may not have provided enough guidance or preparation in terms of long-term user experience and policy transparency.
Professor Kim Yong-hee noted, "It is also questionable whether they are showing technology and services worth the willingness to pay." He pointed out, "They have recently gained a comparative advantage over Apple with AI, so hasty monetization could produce unintended results."
Experts predicted that a premium feature subscription method is the most likely scenario. Seo Yong-gu, a professor of business administration at Sookmyung Women's University, pointed out, "Rather than applying fees to existing AI services that were provided for free, it is expected that they will choose to release premium services and suggest paid subscriptions. If supported by functional differentiation, demand will emerge centered around users who are sensitive to new technology."