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Humane, the AI wearable startup, has experienced a commercial disaster with its flagship product, the AI Pin.
Despite launching with high hopes, the company has faced significant challenges, but none more prominent than receiving more returns than sale alerts.
According to internal sales data obtained by The Verge, the AI startup has had more of its products returned than those remaining in customer’s hands, and between May and August, more Pins were being returned daily than sold.
Only around 7,000 units had not been returned to the company from the 10,000 units initially sold when it launched.
Biggest Commercial Disaster?
This stark reality is compounded by the startup’s poor financial performance since it launched its devices.
Humane’s wearable device and accessories have generated just $9 million in lifetime sales, a far cry from the company’s initial expectations. However, the situation worsens when considering the alarming return rate.
Humane AI Pin sales have been even worse than you thought
• Just ~7,000 are still in circulation
• 10,000 shipped vs goal of 100,000
• $1 million-worth have been returnedBetween May and August more pins were returned than were bought pic.twitter.com/e7GZrMwx5s
— Morning Brew ☕️ (@MorningBrew) August 7, 2024
Over $1 million worth of products have been returned, with around 1,000 purchases canceled before shipping, sources told the Verge, although Humane AI disputed the numbers.
This not only affects the company’s revenue but also leads to unrecoverable losses. Due to T-Mobile’s restrictions, returned products cannot be refurbished and resold, resulting in every return becoming electronic waste, which adds to the company’s financial burden.
When it launched its AI Pin in April, the company had hoped to ship 100,000 units at $699 each. But it now finds itself with limited options going forward as customer interest has slowed following a series of negative reviews, bugs, and slow performance on the device.
In addition to the hefty cost of purchasing the Pin, Humane also required buyers to pay $24 for an unlimited data plan with T-Mobile. However, besides the pricing, the product was unanimously labeled a failure. Popular YouTuber Marques Brownlee even called it the “worst product ever reviewed.”
Tech enthusiasts and critics alike complained about the deep software flaws and hardware issues.
Too Many Faults in One Product
For a product initially pitched as revolutionary tech that would reduce the ever-growing dependence on smartphones, the AI Pin had reliability concerns, especially with poor battery life and overheating issues, which caused discomfort for many reviewers.
Finally, given its limited functionality compared to modern smartphones, many observers could not justify the expensive price point, which includes additional subscription fees.
For some close observers, many of Humane’s issues are self-inflicted. The company ignored concerns from a select group of testers before its public launch. This early test group included the co-founder’s parents, several investors, and early employees. One alpha tester was said to have contacted the support group to describe the product as “frustrating.”
So far, Humane has been trying to address a few of the issues that made its AI Pin undesirable. The firm rolled out the ChatGPT-40 model last week to reduce hallucinations and improve responses.
Humane was valued at $850 million in 2023 before it went public. However, the tech company is now hunting for a potential buyer who would buy up the company at a valuation of between $750 million and $1 billion.
This could be a tough sell considering that the companies that could afford such sums are quite small. HP has been reported to be interested in purchasing the company. Humane is also reportedly negotiating with its current investors for a debt-for-equity swap.
