Is the $199 Rabbit R1 a loss leader for data collection

Question

I've been following the recent launch of the Rabbit R1. Given its surprisingly low price point relative to Humane's Ai Pin and the Meta Smart Glasses, I'm curious about the business strategy behind it.Do you think Rabbit R1 is priced as a loss leader? More specifically, is it possible that the low price is a strategy to attract a large user base and then monetize through the sale of user data?Rabbit's privacy policy [1] states: > we are committed to never selling or sharing your data with any third party, under any circumstances without your formal, explicit permission.How sustainable do you think this pricing model is and what are implications for user privacy?[1] https://www.rabbit.tech/privacy

lfciv · Accepted Answer

Based on nothing but a guess, my bet is that it's probably roughly breakevenThough I'm curious how they're not charging any subscription given that the device will have ongoing costs to run the models. That feels like it could hemorrhage money &ndash; though if users are actively using it I guess it'd be a good problem to have

atleastoptimal · Answer

Yes. But also they probably anticipate AI models improving massively and inference costs going way down in the near future. In that case the future economics of an AI-dedicated hardware device would be much more favorable, and by that point they'll have had a sizable first mover advantage.

larrykubin · Answer

There was an interview with the CEO on This Week in Startups today that answers some of these questions:https://www.youtube.com/watch?v=X-MNgciL5hw

solardev · Answer

Is this even real? Why would you want something like this when everyone has a smartphone with the same capabilities already?

paulcole · Answer

IMO it&rsquo;s a longshot they even ship let alone are in business 2 years from now.

Is the $199 Rabbit R1 a loss leader for data collection

Yes. But also they probably anticipate AI models improving massively and inference costs going way down in the near future. In that case the future economics of an AI-dedicated hardware device would be much more favorable, and by that point they'll have had a sizable first mover advantage.

There was an interview with the CEO on This Week in Startups today that answers some of these questions:
https://www.youtube.com/watch?v=X-MNgciL5hw

Is this even real? Why would you want something like this when everyone has a smartphone with the same capabilities already?

IMO it’s a longshot they even ship let alone are in business 2 years from now.