Iyo thinks Gen AI earbuds could succeed where Humane and Rabbit stumbled

According to reports, a month after launching their first product, Humane’s co-founders brought their well-funded startup to market. While even the company’s biggest cheerleaders didn’t expect Ai Pin to change the world in such a short time, few of its many critics expected things to move so sideways and so quickly.

Humane’s biggest competitor, the Rabbit R1, didn’t fare much better. Shortly after its launch, the AI-powered generative mobile device was slammed by critics. The most striking criticism of the “half-baked” device was that it could have been an app rather than a $200 hardware device.

The excitement around the launch of both devices is proof that there is interest in a new form factor that uses LLM (Large Language Models) in a way that is actually useful in our everyday lives. For now, however, it’s safe to say that no one has broken ground yet.

Iyo represents the third form in the quest to deliver self-contained, generative AI devices. Unlike Humane, which tried to introduce an entirely new form in the form of a lapel pin, Iyo is transforming its technology into a category that is already wildly successful: Bluetooth in-ear headphones.

When Iyo One launches this winter, the company will be able to leverage several years of consumer education on how to integrate assistants like Alexa and Siri into headphones. The jump from this to more sophisticated LLM-based models is much shorter than Ai Pin, requiring a fundamental rethinking of the way we interact with our devices.

Like Humane and Rabbit, Iyo’s founding predates the current AI hype cycle. The company’s history dates back to before 2019.

“I saw all the people I know in AI, three different research organizations at Google, all the people outside, OpenAI and others make incredible progress with these language models, all independently,” founder and CEO Jason Rugolo told TechCrunch . “I realize it’s algebra and data and no one knows any of this stuff. I saw that basic models would proliferate and become commoditized, which was very controversial in 2019.”

While Humane managed to generate a lot of interest thanks to the founders’ internship at Apple, Iyo was actually founded at Google. The company’s incubator was located at Alphabet X’s “Moonshot factory,” which spawned projects such as Glass and Project Loon. Iyo was spun off in 2021. However, unlike X alumni Waymo, Wing and Intrinsic, the company does not operate as a subsidiary. Instead, Alphabet was Iyo’s first investor. As Rugolo is quick to point out, the search engine giant does not have a seat on the company’s board.

Another important advantage is that, despite the name, One will not be the first Iyo product. Currently, you can visit the company’s website and purchase a different – but related – audio device. The $1,650 Vad Pro is actually a sophisticated in-ear studio reference monitor. The device has a similar rounded shape to the One and has head tracking, but Iyo’s first commercially available device is wired.

“If you build a digital audio workstation like Logic Pro,” Rugolo says, “it’s connected to software we’ve developed that uses our virtualization technology.” This is intended to help engineers create spatial audio mixes.

The Vad Pro speak to another important element of the Iyo One lineup: they are designed primarily as premium headphones. Unlike the Ai Pin and R1, which offer no value beyond AI capabilities, the Iyo One can also simply function as a good pair of headphones.

The headphones are noticeably larger than standard Bluetooth in-ear headphones. This is thanks in part to the use of a much larger battery, which Rugolo claims can last up to 16 hours on a single charge when paired with your phone in Bluetooth mode. On the other hand, if you use the One in cellular mode without a tethered handset, that number drops significantly to about an hour and a half.

Cost is also an issue. While the Iyo One will cost a fraction of the Vad Pro, it’s still cheap at $599 for the Wi-Fi model and $699 for the cellular version. The latter puts it in the same price range as the Ai Pin and hundreds of dollars more than the R1. This is well beyond the reach of the average consumer who might buy the equipment just to play with it. However, unlike Ai Pin, Iyo One will not require a monthly subscription fee.

“This type of model is really an outcome of the venture,” Rugolo said. “They are trying to put pressure on companies to lock people in. I don’t like this model. This is not the best for customers.” However, the cellular version will require users to purchase a plan from their carriers. It’s just standard practice.

As Denon’s eventual acquisition of Nura has shown, the Bluetooth in-ear headphones category is a difficult one for a startup, no matter how innovative the underlying technology may be. On the one hand, the companies compete with the biggest names in the industry, including Apple, Samsung and Google. On the other hand, you have pairs often designed by Chinese manufacturers that can be purchased for as little as $10.

However, Rugolo believes that the in-ear headphones will provide value from day one. Ai Pin and R1 tried to say the same thing.

“I think the key is to deliver value immediately, out of the box, focusing on the features you will ship with,” said founder Iyo. “We believe it’s a platform and we think there will be millions of what we call ‘audio apps,’ or AU apps. But people don’t buy platforms. They buy products that do very useful things for them. When it comes to sound isolation, comfort and music quality, we believe there is a very large market for these devices.