Samsung considers Galaxy AI subscription for power users
What's the story
Samsung is considering a monthly subscription for its Galaxy AI service, the company's president and CEO for Southwest Asia, JB Park, has said. The move comes as memory chip prices continue to rise and the cost of running AI services increases. The proposed subscription would be aimed at users who heavily rely on Galaxy AI features.
Rising expenses
Cost of providing AI features to users
Park highlighted that while Galaxy AI features are free for consumers, they come at a huge cost to Samsung.
He explained that these features require a lot of computing power, especially those involving on-device capabilities like photo editing.
The advanced AI features rely on cloud servers to process user requests, which increases the computing cost as more data is processed by the AI.
Tiered services
Users with higher AI requirements could opt for paid plan
Park said that users with higher AI requirements could opt for a paid Pro tier. However, basic AI features, which account for about 90% of usage, will continue to be offered free.
This strategy is in line with a wider industry trend where smartphone makers are shifting more of the processing onto devices instead of relying on cloud servers to cut down computing costs.
Market impact
Memory chip prices have more than tripled in last year
The global memory chip shortage has also pushed up smartphone manufacturing costs. According to Counterpoint Research, memory chip prices have more than tripled in the last year due to demand from AI data centers.
This has resulted in a 15% increase in smartphone prices in India over the past year.
Samsung has absorbed much of this cost increase over the last eight months, raising prices less aggressively than its competitors.
Market performance
Smartphone shipments in India fell 10% year-on-year in June quarter
Counterpoint estimates that smartphone shipments in India fell 10% year-on-year in the June quarter due to higher prices.
However, Samsung's shipments grew by 2%, thanks to its Galaxy A and flagship Galaxy S series.
Last week, Samsung launched its eighth-generation foldable smartphones, its most expensive lineup yet.
The devices will be manufactured at its Noida factory.