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Iyo believes its AI earbuds can succeed where Humane and Rabbit failed.

TechBrunchBy TechBrunchMay 27, 20245 Mins Read
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A month after announcing its first product, Humane's co-founders reportedly took their well-funded startup to market. Even the company's biggest cheerleaders didn't expect AiPin to change the world so quickly, but some of its many critics didn't expect things to get so bad so quickly.

Humane's biggest competitor, the Rabbit R1, also didn't fare much better. Upon release, the generative AI-powered handheld device was panned by critics, with the most prominent criticism of the “half-baked” device being that it could have been an app instead of a $200 piece of hardware.

The excitement surrounding the launch of both devices is clear evidence of growing interest in new form factors that leverage LLMs (large-scale language models) in a way that is truly useful in everyday life, although it's fair to say that as of now, no one has landed on the ground yet.

Iyo is the third form factor in the effort to deliver a standalone generative AI device. Unlike Humane, which attempted to introduce an entirely new form factor in the form of a lapel pin, Iyo has embedded its technology into an already hugely successful category: Bluetooth earbuds.

When the Iyo One launches this winter, the company will be able to build on years of consumer education around integrating assistants like Alexa and Siri into headphones, and the transition from there to a more sophisticated LLM-based model is much shorter than for a model like the Ai Pin, which requires a fundamental rethinking of how we interact with devices.

Like Humane and Rabbit, Iyo's founding predates the current AI boom cycle, with the company's history stretching back to before 2019.

“I've seen people I know in the AI ​​industry, three different research organizations within Google, people outside, OpenAI and others, all independently, making incredible progress on these language models,” founder and CEO Jason Rugolo told TechCrunch. “We know that it's an algebra and data problem, and no one has a monopoly on either. We expected to see a proliferation of foundational models that would become commoditized. It's going to be very controversial in 2019.”

While Humane was able to rely on its founders' tenure at Apple to garner a fair amount of interest, Iyo was actually founded within Google; the company was incubated within Alphabet X's “moonshot factory,” which spawned projects like Glass and Project Loon. Iyo spun off in 2021; however, unlike fellow X alumni Waymo, Wing, and Intrinsic, it doesn't operate as a subsidiary. Instead, Alphabet became Iyo's first investor; as Rugolo is quick to point out, the search giant doesn't sit on the company's board of directors.

Yes, there was a TED talk by Iyo. Image credit: TED Image credit: Iyo

Another key plus is that, despite its name, the One isn't Iyo's first product. You can currently head over to the company's website to buy a different (but related) audio device. The $1,650 Vad Pro is essentially a sleek pair of in-ear studio reference monitors. The device has the same rounded form factor and head-tracking capabilities as the One, but it's Iyo's first commercially available device to be wired.

“When you build a digital audio workstation like Logic Pro, you use it in conjunction with software that applies our virtualization technology,” Rugolo says, which is designed to help engineers create spatial audio mixes.

The Vad Pro embodies another key element of the Iyo One's pitch: it's designed to be a premium headphone, first and foremost. Unlike the Ai Pin and R1, which offer little value beyond their AI features, the Iyo One simply functions as a great headphone.

The headphones are noticeably larger than your standard Bluetooth earbuds, in part because they have a sizeable battery that Rugolo claims will get you up to 16 hours of use on a single charge when paired with your phone in Bluetooth mode, though that time drops significantly to around an hour and a half if you're using the One in cellular mode without a phone connected.

Cost is also a concern. The Iyo One is a fraction of the price of the Vad Pro, but it's still cheap at $599 for the Wi-Fi model and $699 for the cellular version. The latter is in the same price range as the Ai Pin and several hundred dollars more than the R1. That's well outside the budget of the average consumer buying hardware just to tinker. Unlike the Ai Pin, though, the Iyo One doesn't require a monthly subscription fee.

Vad Pro. Image courtesy of Iyo

“This model comes from venture capitalists,” Rugolo says. “They try to corner companies to lock people in. I don't like that model. It's not best for the customer.” But the cellular version requires users to sign up for a plan with a carrier, which is standard practice.

As Nura's eventual acquisition by Denon demonstrates, the Bluetooth earbuds space is tough for startups, no matter how novel the underlying technology: On one hand, you have companies competing with industry giants like Apple, Samsung, and Google; on the other, you can find earbuds designed by Chinese manufacturers for as little as $10 new.

But Rugolo believes the earphones will offer value from day one — something the Ai Pin and R1 have a hard time saying.

“I think the key is to provide value out of the box and focus on the features that are included,” says the Iyo founder. “We think of this as a platform, and we think there will be millions of AU apps, what we call 'audio-first apps.' But people don't buy platforms. They buy products that have features that are very useful to them. So we think there's a very large market for these devices, just for sound isolation, comfort, and music quality.”



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