More Returns than Purchases: Insights into the Humane AI Pin's Market Performance

Humane, known for its innovative AI Pin introduced earlier this year, is facing unexpected challenges. After a tepid response to its custom AI hardware, leadership changes, and discussions regarding potential acquisition, the startup is now grappling with troubling sales figures and returns. According to The Verge, which cites internal sales data, the past quarter ending in August saw returns surpass sales. Currently, fewer than 7,000 AI Pins remain in the hands of customers.

The company now holds over a million dollars worth of returned inventory. Compounding the issue, existing carrier agreements have rendered these returned units virtually unsellable; unlike phones and laptops, the AI Pin cannot be refurbished for resale.

Originally aiming to sell 100,000 units, Humane has shipped only about 10,000 to date. While Humane disputed The Verge’s report, further details concerning sales and financial health remain undisclosed.

A partnership with T-Mobile presents a significant barrier; once an AI Pin is delivered, there’s no mechanism for reassignment after a return. Humane is exploring solutions, indicating that they haven’t completely abandoned the returned units.

The AI Pin, conceived by former Apple executives Imran Chaudhri and Bethany Bongiorno, was launched with considerable fanfare, debuting at a TED Talk and even appearing on fashion runways. Priced at $699, plus a $24 monthly subscription, its premise focused on liberating users from their smartphones. Equipped with an AI assistant for voice-command tasks and a laser projector that turns a palm into a screen, the engineering was impressive. However, despite flashy presentations, actual user performance has fallen short of expectations.

In the months following its release, Humane made refinements and upgraded to OpenAI’s GPT-4o, which delivers enhanced conversational abilities and impressive contextual awareness. Yet, these enhancements have not significantly changed buyer sentiment.

Issues such as overheating and substandard battery life emerged as major complaints. One user on Reddit noted, “The one big issue I have is that after starting to explore features, it shuts down with a message saying ‘Your AI Pin needs to cool down for a few minutes.’ This occurs just five minutes into use.” Another user echoed similar frustrations, mentioning significant latency in responses and inaccurate answers, ultimately returning the device. With these challenges, the future of Humane, particularly regarding a second-generation AI Pin, appears uncertain, especially in a market that has yet to embrace AI hardware, as evident with other products like the Rabbit R1.

In May, Bloomberg reported that Humane was seeking prospective buyers for a valuation between $750 million and $1 billion, but no deals have materialized. As the company continues to face high-profile departures and undergo internal restructuring, finding stability in this emerging tech landscape remains a daunting task.