Charging you for Galaxy S24 AI features is a dumb mistake Samsung won’t make

The Galaxy S24 series is rumored to be big on generative AI. It's evident that this is going to be a core area of focus for manufacturers in 2024. Qualcomm's latest Snapdragon 8 Gen 3 chipset, which will also be used for the Galaxy S24 series, comes with a whole host of on-device generative AI features. Samsung's answer to this chipset, the Exynos 2400, will have similar functionality.

These new chipsets will be utilized in the Galaxy S24 lineup due early next year. Consequently, they'll provide enhanced on-device AI experiences, enabling you to leverage AI offline and completely on the device. A wild rumor has claimed that Samsung is considering making customers pay to use the Galaxy S24's AI features, but here's why I think this is a dumb mistake that the company likely won't make.

The rumor remains completely unsubstantiated. There's no shred of evidence at this point in time that Samsung wants to offer a subscription service next year that will unlock the Galaxy S24's advanced generative AI features for customers. Firstly, the optics are horrible. If prices don't rise, the Galaxy S24 Ultra will start at $1,199. Imagine paying that much for a new flagship phone and then have to pay a monthly fee to unlock some of its features!

One of the biggest benefits of on-device generative AI is in the name itself. It runs entirely on the device so the features can be accessed offline and the company doesn't need to pay for expensive processing in the cloud to support the feature. Take ChatGPT for example. It does everything in the cloud from the moment you give it a prompt. OpenAI, the company running it, reportedly spends $700,000 per day just to keep the service running. Naturally, OpenAI will eventually look to enhance its business models to support this burn rate beyond the billions in VC funding that it has amassed.

LLMs or Large Language Models that can run on-device are a solution to this expensive problem. Simply put, these are super smart algorithms that have access to a large dataset which they can use to generate content based on the prompts provided. Qualcomm showcased the on-device AI capabilities of the Snapdragon 8 Gen 3 using Meta's open-source Llama 2 LLM with the chipset being able to run 10 billion parameters on the device.

Manufacturers have the option to use a plug-and-play solution like this or use their own LLM. If Samsung opts for the former, whereby whatever type of on-device AI chatbot it offers on the Galaxy S24, uses an algorithm and dataset maintained by Meta, what would it be charging a subscription fee for? Features like Stable Diffusion, which make it possible to generate images based on word prompts, also use similar third-party AI models.

Qualcomm also showcased the Snapdragon 8 Gen 3's ability to remove objects from videos. This AI feature relies on the video object eraser technology created by Arcsoft. The fragmented nature of the AI industry means that manufacturers like Samsung will have to work with different partners to provide different AI features on their devices. The other option is to build every LLM, dataset, and AI feature on its own which would be unnecessarily complicating the matter, even if that justifies charging a subscription fee for the features.

Any move to put AI features for smartphones behind a paywall is going to be very counterproductive in my view. 2024 will be the first year that AI takes center stage on new phones. Manufacturers will have to put in a lot of effort to make sure customers realize what AI can help them with on their devices. The average user who doesn't understand what LLMs are or what they can do with Stable Diffusion won't even bother trying out these features if it costs them a monthly fee just to unlock the features.

There's also the possibility that for most users, the novelty of these features will wear off once the new phone honeymoon period ends. For example, how many times do you imagine an average user relying on Stable Diffusion to create images? Why would they bother to pay for features that they either don't understand or don't have enough of a reason to use them on a daily basis?

We've often spoken about Samsung's lack of a solid subscription business in comparison to Apple. It comes as no surprise that Apple's services revenue hit a record $22.3 billion in Q4 2023. Imagine that for a second. It's making more than $22 billion in one single quarter from services like Apple Music, Apple TV, Arcade, App Store, News+, and others.

There's no question that Samsung messed up by failing to see the brilliance in Apple's plan when the latter pivoted to expanding its subscription-based revenues, ensuring that even when hardware has a slow quarter, there's a whole other business ready to support and expand the bottom line. It's commendable if Samsung now wants to try and create a similar moat around its business, but it's going to be far from a smart idea to try and do it by making customers pay for AI features on the Galaxy S24.

Circling back to the point about optics. Every single flagship phone manufacturer will be talking about how the on-device generative AI capabilities of their phones is better than the competition. Does Samsung really want to support their marketing efforts by giving them a reason to say that not only are their AI capabilities are better, but also free as opposed to Samsung? Case in point, the new flagship phone Xiaomi teased at the Snapdragon Summit last month, which brings many of the Snapdragon 8 Gen 3's on-device AI features. It's not charging users to access any of those features.

These are only a few reasons why I feel that Samsung won't make the dumb mistake of charging people to use the Galaxy S24's AI features. I believe that this unsubstantiated rumor will not amount to anything more than just that, a rumor. There has not been the slightest hint from Samsung that it may be considering the idea, so everyone looking forward to the Galaxy S24 series can rest assured, you will in all likelihood be able to utilize its full potential without having to pay a monthly fee.