AI Hardware's Failed Promise: What Humane and Rabbit Taught (January 2024)

Original post is here.

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Two AI hardware startups launched with swagger. Humane's $699 Ai Pin and Rabbit's $199 r1 promised to replace your smartphone with voice-controlled AI agents. Both flopped commercially. Both revealed critical truths about AI hardware.

What These Devices Proved Works

Natural language interfaces have finally arrived. Voice control in 2024 is good enough. Ask questions, complete tasks, control devices—all through conversation. The technology finally matches the promise.

Multimodal interfaces unlock new possibilities. Combining voice, vision, and gesture creates powerful interactions. Humane's computer vision estimated protein content in real-time. Rabbit's camera added context to voice commands. When multiple inputs work together, interfaces become intuitive.

AI agents can complete real tasks. These aren't chatbots. They're agents that order pizza, book rides, and manage your schedule. Generative AI moved from answering questions to taking action.

Edge computing enables instant responses. Processing on-device means no latency, better privacy, and computer vision that actually works. Amazon's Fire phone failed at this a decade ago. Today's AI chips make it seamless.

Why the Market Said No

Smartphones already do this. Apple and Google are building these capabilities into devices consumers already own, charge, and carry. An extra device is a dealbreaker.

Setup complexity kills adoption. Rabbit's "learning mode" required users to train the device. Consumers have ignored shortcut tools for years. They won't suddenly embrace programming their hardware.

Voice isn't always appropriate. Need privacy in public? Want to compare products side-by-side? Designing something visual? Voice fails. The interface must match the task.

Consumer behavior changes slowly. Only 23% of adults are comfortable with voice interfaces. Only 13% prefer them. Changing habits requires distribution, time, and hands-on experience these startups couldn't provide.

Borrowing moments doesn't scale. The strategy of completing tasks across apps sounds perfect. Airlines embed rideshare links. Maps suggests scooters. But consumers don't use these features at scale. The r1 bet everything on a behavior pattern that hasn't emerged.

The Strategic Takeaway

These devices failed as products but succeeded as prototypes. They proved AI hardware can deliver natural interfaces, agentic behavior, and edge intelligence. They also proved consumers won't buy standalone devices when smartphones will inevitably offer the same capabilities.

The winners won't be device makers. They'll be the companies embedding these capabilities into hardware consumers already trust. Apple. Google. Maybe Microsoft.

The real question isn't "Can we build it?" It's "Why would consumers carry it?"

AI hardware's future isn't in replacing smartphones. It's in becoming invisible—embedded in devices, vehicles, and environments we already use. The technology works. The product strategy didn't.