AI hardware has been a disappointment so far — will CES 2025 be a turning point?

The upcoming CES 2025 trade show in Las Vegas marks a critical moment for AI hardware manufacturers as they face increasing pressure to demonstrate real-world value beyond mere AI integration.

Setting the stage: As CES 2025 approaches, the tech industry’s focus has shifted from simply incorporating AI to proving its practical worth in consumer devices.

• The January 7 Las Vegas event is expected to showcase a wide array of AI-enabled products, from smart eyewear to AI-powered accessories
• Rather than standalone AI devices, manufacturers are increasingly integrating AI capabilities into existing product categories
• Small companies and startups are particularly active in the AI hardware space, as they seek alternatives to competing with tech giants in AI model development

Market reality check: The past year has revealed significant challenges in creating compelling AI-dedicated hardware products.

• Notable 2024 launches like the Humane AI Pin, Rabbit R1, and Friend necklace failed to meet consumer expectations
• Many new AI devices struggle to differentiate themselves from functionality already available on smartphones
• AI features have rapidly transformed from being a unique selling point to an expected standard feature in consumer electronics

Success patterns emerging: Some companies have found effective approaches to AI hardware integration by focusing on practical utility rather than AI capabilities alone.

• Ray-Ban Meta smart glasses represent a successful model, incorporating AI as one feature within a broader set of useful functions
• Privacy-focused controls have emerged as a potential differentiator for smaller companies seeking market share
• Manufacturers are learning that AI must serve as an enhancement to core product functionality rather than the primary selling point

Looking ahead: The evolving landscape suggests that AI hardware’s success will increasingly depend on delivering tangible benefits beyond basic AI integration.

• CES 2025 will feature AI integration across diverse product categories, including necklaces, eyewear, headphones, and personal devices
• Companies face mounting pressure to demonstrate how their AI hardware solutions solve real consumer problems
• The market is likely to favor products that seamlessly blend AI capabilities with practical, everyday functionality

Market implications: The AI hardware industry is entering a phase where practical utility and clear value propositions will separate successful products from mere novelties, potentially leading to consolidation among manufacturers who fail to meet these criteria.