In the week since its unveiling at the Consumer Electronics Show (CES) in Las Vegas, the Rabbit R1 has created a frenzy in the tech space, with many branding the Tamagochi-looking gadget as “the next big thing”, “the AI future we were promised”, and “the smartphone challenger”.

Born of a collaboration between US start-up Rabbit and tech innovator Teenage Engineering, the R1 is a “pocket companion” that aims to break away from the app-based operating system. With no apps and only a 2.88-inch touchscreen, a touch-to-talk button, and a rotating camera for computer vision, the palm-sized, bright orange device acts as an AI voice assistant similar to Alexa – playing songs, making bookings, and retrieving information for its user through a single channel instead of via multiple apps.

It can even edit images on Photoshop.

“I think Rabbit r1 gives us a glimpse of a new type of man-machine interaction where the agent gets things done for us by learning to use human interfaces and tools instead of APIs designed for machines,” said Ross Veitch, CEO and co-founder of Wego. “What I find interesting is that they’ve developed a new type of foundation model, which they call a “Large Action Model” which has been pre-trained on human interactions with apps and websites. They claim their LAM is significantly more efficient at figuring out UI’s than LLM based models,” he added.

Indeed, at the heart of the R1 lies Rabbit’s custom AI operating system. Unlike chatbots that generate text responses, Rabbit’s LAM generates actions on behalf of users, such as online grocery shopping or booking transportation, without the need for custom integrations.

While the R1 is positioning itself as the ‘antidote’ to the smartphone, it’s clearly not for everyone. “Rabbit doesn’t solve anything important for travel other than automating the booking process,” says Bobby Healy, CEO and co-founder of Manna Drone Delivery. “And it isn’t the booking process that’s hard – it’s the evaluation process,” he told WiT.

Healy elaborated further, “The Rabbit UI won’t cut it. Travel, particularly hotels, but also flights, require a ton of subjective evaluation and collaboration when it comes to leisure. A 3-inch device does not deliver a good presentation of those options. Sure, the LAM is a good idea for robotic tasks but when it comes to solving the highly involved process of planning a trip, I don’t think it’s going to replace the desktop or phone.”

Omri Morgenshtern, CEO of Agoda, is also sceptical about R1’s application in hospitality. “The biggest problem is people won’t trust an automated assistant to pick the right options for them, or to know them well enough,” he said. “It’s about educating the customers and having super strong personalisation. I don’t think Rabbit solves any of that. Will you let Rabbit order from a menu for you if you go to a new restaurant, or will you want to see the menu?

“Eventually, if done right, and if it can simulate the way a human personal assistant works, like it knows you very well, you learn to gradually trust them over time, and it takes over simple tasks for you and gradually grows… then it can save a lot of time. And it can take the level of personalisation to the next level, especially as it can potentially access more personal data than a travel website,” added Morgenshtern.

Simplicity is a double-edged sword

Rabbit’s CEO, Jesse Lyu, emphasised the company’s vision for “the simplest computer” during a CES keynote. Its simplicity, however, may be the reason why it’s not being touted as a ‘smartphone replacement’, but rather an ‘alternative’ to the smartphone.

When asked about the benefits of a gadget like R1 over a smartphone, Healy replied, “None that I can see. Just another subordinate device for those that love toys. Ultimately, every android and iOS phone will get a native LLM (and LAM) and that will be it; Lots of dead rabbits.”

“AI doesn’t require a new OS or hardware,” echoed Morgenshtern. “The strongest one you know is ChatGPT and you can run it on your phone or computer. The more interesting question is what’s stopping us from becoming assistants? That’s the trust issue. And the fact that for some things, the visual scroll-and-click is actually faster and more convenient than chatting with an assistant. The jury is still out about the right interface.”

Unlike conventional assistants, the R1 is a standalone device and does not require connection to a smartphone. Priced at $199, the R1 will be trained to work with popular apps, with plans to add more functionalities over time. Users can also train their own agents or “rabbits” on niche apps, showcasing the device’s adaptability and versatility.

For Wego’s Veitch, it all boils down to function and utility value. “A personal travel assistant should be able to do for you anything a good travel agent could,” he said. “Research stuff for you, give you recommendations and options, ask you to qualify or narrow down your request where needed, ask you to confirm then go ahead and make the booking or reservation using your pre-saved payment credentials, traveller info, loyalty memberships.

“Once done it should add it to your calendar. As you approach the free-cancellation date it should prompt you and ask if you want to proceed or not. It should email or chat with the hotel ahead of check-in to re-confirm the booking, make sure the loyalty number & status is on file and then pass along any special requests like preferred room type, pillow types, non-smoking preference. Between booking and departure, it should look for better deals and automatically cancel and rebook,” added Veitch, outlining the criteria of a successful digital assistant.

Adoption, adaptation, and replication

The obvious trajectory for any groundbreaking device is for its tech to be studied, adopted, and then applied to existing devices and gadgets. You best believe smartphones aren’t going anywhere without a fight.

“Large OTAs will all do demos, like Kayak’s ChatGPT plugin. Translating demos into a real business for this domain doesn’t make sense,” suggests Healy. He adds, “For assistants, you need to apply a “is this a feature that Apple or Google will ultimately embed?”. And if the answer is yes, it’s going to be very hard for Rabbit and similar makers to survive long term. I mean…why did they even do hardware? Rabbit is a software product, and for some reason they decided to try and compete with smartphone OEMs.”

Similarly, Veitch believes Rabbit’s road to dominance of the mobile device market is already quite complex. “iOS and Android are the dominant smartphone platforms that you’d want to target and there are legal and technical restrictions that limit the extent to which any app can interact with other apps on the platform. Rabbit seems to get around this by running apps in emulators on virtual machines in the cloud. A user has to access a web portal, “The Rabbit Hole”, where they log into their accounts with Gmail, Uber, Expedia, Doordash… after which presumably the tokens are saved and used for future sessions by Rabbit OS.”

This is where, Veitch thinks, replication is possible.

“By building their own hardware Rabbit is bypassing Apple and Google’s app store T&C’s. I suspect very soon we will see Rabbit-like functionality added natively to iOS and Android, probably via Siri and Google Assistant. The companies that control the operating systems of our mobile devices are in the best position to add a layer that automates interactions with third-party apps.

“Additionally, they already have our payment credentials, travel history, search history, brand preferences, email and a bunch of other data on file which can be used to personalise an assistant.”

How far does this rabbit hop?

Since its unveiling at CES, the Rabbit R1 has gained remarkable popularity, with over 30,000 units pre-ordered and in the pipeline. The first two batches have already sold out, prompting the company to open a third batch, scheduled for delivery between May and June 2024.

As screen addiction and social media continue to cause smartphone fatigue in some user segments, alternative, minimalist devices like the R1 could address that gap in the market. The device is already proving to be a viral success, but whether or not it has widespread applications across different industries, like travel and hospitality, remains to be seen.