Tech Giants Race to Put AI Gadgets Under the Christmas Tree

Nearly four years after ChatGPT’s launch, the leading consumer technology companies are promoting improved personal assistants and faster on-device chips with AI capabilities as they try to sell new laptops, tablets, phones and smart home computers. Microsoft kicked off the launches with an Nvidia-powered Windows laptop starting at $2,599, built around an AI chip called RTX Spark that can run powerful AI without relying on the cloud. Amazon then released Alexa tablets, its first hardware named after its smart assistant. The largest, the Alexa Tablet 12 Pro, costs $550, compared with $155 for its predecessor, the Fire HD10. This week, Apple unveiled HomeView, a $299 smart home hub powered by Siri AI, with a mountable 7-inch screen and facial recognition software that can personalize the device for multiple family members.

Success is far from guaranteed. Consumer sentiment data is the weakest in 12 years, largely because of stubborn inflation, and there are growing fears about AI safety risks. The new technology also comes with a learning curve. Jitesh Ubrani, an analyst at IDC, said tech companies want to introduce AI to consumers to lay the groundwork for more aggressive device launches in the coming years.

“This is really about getting devices into consumers’ hands, into consumers’ homes, slowly teaching them how to use it, and getting feedback from them,” Ubrani said. He added that new gadgets from Apple, Amazon and Microsoft are not expected to sell in large volumes, at least not yet. Getting affluent early adopters on board now could be considered a win given the macro headwinds. Hardware prices across the board have risen, driven by soaring costs for components, especially memory and storage, as power-hungry AI servers consume most of the capacity. Those price hikes have led to plunging shipments this year of new smartphones and laptops.

Analysts applauded Apple for introducing HomeView at a reasonable price given component shortages. “Apple has prioritized ecosystem adoption over immediate high hardware margins, delivering a local-AI hub at a price point that undercuts what a spec-heavy machine should logically cost,” said Mohit Agrawal, who specializes in AI at CounterPoint Research, in an email. Dipanjan Chatterjee, an analyst at Forrester, said the shopping season will mark an early test of consumer demand for a new class of gadgets. “I think consumers are interested in what AI can do,” Chatterjee said. “What’s less clear is whether they are interested in buying hardware specifically because it is an AI device.”

Despite the economic headwinds, the spending outlook heading into the holidays remains robust. Nearly half of U.S. consumers expect to spend the same or more this year compared with last year’s holiday season, according to a McKinsey survey published in August. Bain published a report last month predicting that U.S. retail sales over the holidays will set new records and top $1 trillion for the first time. Analysts cautioned, however, that more than half of the nominal sales growth will come from higher inflation pushing up prices. Bain predicted that sales in some electronics and appliances will remain flat.

“In a time when folks are being a little money conscious, you say, ‘Do I really need the next one of those, or could I drag out the replacement cycle on whatever it is?’” said Aaron Cheris, head of Bain’s global retail practice, in an interview. “We’ve seen things that are discretionary purchases drag out longer.”

All three companies emphasized their increasingly intelligent assistants and more powerful chips to run them. Amazon said it is ditching the budget-friendly Fire family in favor of three new Alexa Tablets that feature a more premium design with its souped-up AI assistant front and center. Users can say “Alexa” or tap the “Ask Alexa” button to summon the assistant and ask questions, get personalized recommendations or control their smart home. Amazon also introduced a hands-free mode called “On-Screen Intelligence,” which enables Alexa to read content on the tablet’s display and take action, such as preparing a shopping list based on a cooking video. Microsoft’s new laptops with Nvidia chips can run AI coding models. Apple’s HomeView uses Apple Intelligence to proactively show users their text messages, calendar appointments and photos. Apple expects users to talk to the device, and highlights Siri’s ability to answer a broad range of questions, similar to the experience they have with modern chatbots.

Editor's Summary

Apple, Amazon and Microsoft are using the holiday season to introduce AI-focused devices, including AI laptops, Alexa tablets and Apple’s HomeView hub. The companies are betting on improved assistants and on-device chips to attract early adopters, even as inflation, component costs and weak consumer sentiment weigh on demand. Analysts see the period as an early test of whether consumers will buy hardware specifically for AI.