The world of AI has rapidly evolved, moving from abstract ideas to tangible products, and this transition has created a distinctly pragmatic landscape for both consumers and manufacturers. The current focus rests heavily on achieving Product-Market Fit (PMF). In simple terms, this means ensuring that products are effectively marketed and sold, creating a self-sustaining cycle of supply and demand. As a result, hardware companies are finding that simply honoring traditional designs and cutting costs is no longer sufficient. They must return to the fundamental needs of their target audiences, addressing their core expectations and desires when it comes to AI-infused devices.

This wave of AI enthusiasm exploded initially from large language models, leaving many startups overly focused on the technical aspects of these models instead of the hardware that could leverage this technology. Many companies start by identifying an AI-related idea, only to later search for hardware talent to complement it, leading to a prevalent trend of "AI plus hardware" endeavors. However, this approach often backfires; teams fixate on AI without considering the practicalities of their hardware, which becomes a barrier to successful product development. According to Zou Lin, founder of an AI hardware marketing consultancy with experience in international outreach, numerous teams adept in AI fail to pinpoint real market demands, thus relegating their promising ideas to failure. Unfortunately, this scenario has become increasingly common.

In today's competitive landscape, where AI startups abound, capital investors seek products with robust technology barriers but also essential market acceptance and sales growth. To fulfill this triple demand of technology, user appeal, and sales performance, companies can't only spotlight AI; they need to strategically approach the larger framework of product marketing. Zou Lin emphasizes the importance of this holistic perspective on product development.

In the realm of innovation, fresh players are often buoyed by a phenomenon termed the "newbie halo" effect—a grace period during which new entrants enjoy significant advantages. This effect is also applicable to the AI hardware sector. Discussions with several industry players reveal that this halo is primarily influenced by two factors: the spirit of the times and product innovation. The "spirit of the times" refers to the opportunity for startups to capitalize on AI before established smartphone manufacturers fully integrated these capabilities into their products.

In the last couple of years, AI startups hurriedly filled the gap between traditional smartphones and large AI models, creating a wave of wearables that incorporate AI capabilities. Devices such as AI transcription earbuds, AI question-answering glasses, AI sleep rings, and AI recording pendants became market highlights, with products like Rabbit R1 and Humane AI Pin emerging as major players by the end of 2023.

Yet, the imagination surrounding hardware remains inherently limited. No matter how creatively designed, these innovations often resonate with pre-existing categories. Consequently, competition heats up among companies vying to outdo each other within these established frameworks.

PLAUD.AI, a noteworthy Chinese AI hardware export firm, illustrates this competitive dynamic well. Their flagship product, PLAUD NOTE, is a voice recorder that integrates with GPT to generate meeting notes. Recognizing the limitations of traditional handheld voice recorders, PLAUD.AI innovatively engineered their product to match the size of an ultra-thin IC card, enabling it to magnetically attach to the back of a smartphone. This thoughtful design, rooted in user demand, contributed significantly to PLAUD.AI's unexpected success, with sales surpassing 300,000 units within its first year.

Crucially, PLAUD.AI's success aligns well with the aforementioned "spirit of the times." Prior to Apple’s introduction of iOS 18.1 in late July, iPhone users could not perform call recording natively. PLAUD NOTE not only filled this gap but also utilized GPT to summarize calls, striking directly at consumer pain points and exemplifying the synergy of timing and product innovation.

However, as is often the case in startup environments, the simpler, low-hanging fruits of opportunity may soon be fully exploited. Major smartphone manufacturers like Apple and Samsung have recognized the potential of AI, launching their own AI-enabled devices, quickly encroaching on the space once dominated by smaller hardware startups. One industry insider pointed out that if AI startups originating from large models fail to pivot efficiently towards hardware, time and resources could be severely limited for them in the future.

The trend suggests a shift where AI is now being utilized to reinvent traditionally specialized equipment rather than merely augmenting existing devices. An example is Volley, a United States-based sports technology startup developing an AI-enabled serving training machine. This device, while not revolutionary as a concept, has taken on a persona of its own by serving as an intelligent practice partner instead of just a mechanical machine. The AI trainer uses visual algorithms and machine learning to simulate exercise sessions, allowing for seamless interaction between the machine and the user and turning the experience into a genuine match rather than repetitive isolated hits.

Interestingly, although Volley relies heavily on AI technologies, especially with NVIDIA's cutting-edge visual systems, it does not position itself explicitly as an AI company but rather focuses on innovation within racquet sports. This reflects a fundamental difference in inception compared to many startups that prioritize AI as their core. Volley was born out of a personal passion for tennis, with co-founder John Weinlader teaming up with his brother Dan, a PhD from Stanford, not to merely incorporate AI but to genuinely enhance the sport through hardware innovation.

This intentional design trinity—merging a profound understanding of the sport with advanced AI technology—contrasts sharply with traditional AI startups that may prioritize technical personnel over those with specialized domain expertise. Indeed, the imagination and insights of someone who is passionately engaged in a specific hobby or industry often far exceeds that of a generalist with a technical skillset alone.

Within the current landscape, the potential for AI-enhanced wearables is now mired in competition. This will increasingly involve clashing with established players such as smartphone manufacturers who are expanding their presence in this burgeoning space. Startups can no longer simply compare themselves against other newcomers; they must contend on a broader scale. Additionally, hardware products that have already established a foothold in the market will have an inherent advantage due to prior validation of demand and production methods. The advent of AI offers these established products a refreshed opportunity for market differentiation.

Nevertheless, this window of opportunity is fleeting. Experts caution that in the near future, "hardware plus AI" companies may discover themselves in a cooling market, reminiscent of previous tech cycles. As predicted by various AI hardware entrepreneurs, opportunities could ebb significantly over the coming year, underscoring the need for constant innovation and adaptation within this fast-paced arena.

From a consumer perspective, however, this remains a remarkable period. As competition intensifies, we can anticipate a surge of AI-native electronic products emerging on the market, promising to weave into the extremely fine fabric of daily life as never before.