AI pet mkt cat's meow for the lonely

Nubia said iMoochi uses an emotion-savvy AI model and voiceprint recognition to distinguish its owner from others. Touch sensors placed on its head, back, nose and limbs allow the robot to respond differently when it is stroked, picked up or shaken.

The company has also developed five different personalities for the robot — Hopami, Mimiu, Cynomi, Mogogo and Morin — as it seeks to encourage longer-term interaction.

The approach reflects a broader shift in the AI hardware market, where companies are attempting to turn basic interaction with machines into more personalized and persistent relationships.

"AI pets are not simply replacements for traditional pets," said industry observers. "They are increasingly being designed around the emotional needs of consumers."

Shanghai Robopoet's AI companion toy Fuzozo offers another example. Its characters are based on the traditional Chinese five elements — wood, fire, earth, metal, and water — with five colors and different behavioral characteristics.

The company has adopted a hardware-plus-subscription model. The device costs 399 yuan and comes with a daily allowance of free interactions. Users can wait for the allowance to replenish or pay for additional conversational access.

That model points to one of the industry's biggest unanswered questions: whether AI pet companies can generate recurring revenue after initial hardware sales are transacted.

Investment activity suggests that investors see potential in the category. More than 20 financing deals have taken place in China's AI toy and emotional-companion hardware sector over the past year, Znkedu said.

In June, Robopoet announced that it had raised tens of millions of yuan in an angel funding round. The round included Zhu Xiaohu, managing partner at GSR Ventures, who had previously said he was not optimistic about some early-stage embodied-AI projects.

Big tech is also entering the market segment.

Huawei and Robopoet jointly developed Smart Hanhan, an AI pet positioned as an emotional companion and "soul confidant". The product sold out shortly after launch, according to the companies.

Nubia's iMoochi is priced at 1,699 yuan, or 1,778 yuan with a cloud-shaped charging dock. Its launch marks a more direct push by a handset manufacturer into AI companion hardware.

ZTE, a major shareholder of Nubia, has described the product category as a new type of "AI terminal". The strategy suggests that smartphone companies are looking beyond phones and wearables for new ways to establish daily interaction between consumers and AI.

Experts said AI pets offer several traits that make them attractive as consumer AI devices. They can be used frequently, develop personalized interactions with owners and generate social-media interest, while requiring considerably less hardware and engineering investment than humanoid robots.

But commercialization remains a challenge.

Znkedu reported that many products in the sector still rely primarily on hardware sales. Revenue streams such as subscriptions, digital skins and virtual items have yet to demonstrate a clear and sustainable business model.

The challenge is particularly important because the economics of AI pets may differ from those of conventional consumer electronics. Companies must not only persuade consumers to buy the core hardware, but also give them enough reason to continue interacting with it — and potentially paying for it — months or years after the initial purchase.

For now, the sector's hope is that emotional attachment can turn AI-enabled hardware into a recurring part of consumers' daily lives.

Whether that attachment can support a sustainable business model remains to be seen.

"At present, although the sector is hot, the industry has not moved beyond being seen as 'high-end toys'. Most products rely on novelty to boost short-term sales, with formulaic interaction modes and weak emotional sustainability. User repurchase and long-term retention numbers are insufficient, and a stable category value proposition has yet to emerge," said Lin from Hangzhou City University.

"To achieve long-term development, the industry should not aim to compete with or replace live pets, but must leverage tech-driven emotional companionship to carve out a distinct niche. Through more anthropomorphic and sustainable AI interactive experiences, it can break free from the label of 'merely a novelty toy'," he added.

zhengyiran@chinadaily.com.cn