Meta's Muse Charm Bets on a $1 Billion Bag-Charm Market

Meta has built its newest AI device around a market that Gen Z already made profitable: the decorative bag charm, projected by one analyst firm to exceed $1 billion globally by 2030.

The Muse Charm, just announced by Meta, is a customizable character — users design their own avatar, which makes the AI agent a reflection of them. Its dangle-ready form factor taps directly into a post-Labubu era in which young consumers, primarily young women, have turned everything from lip glosses to hand sanitizers to sunblocks to fragrances into bag charms.

The commercial precedent is substantial. Hailey Bieber's viral Rhode lip case, which attached the lip gloss to a phone case, had a big influence on the idea that beauty products could double as fashion accessories. Rhode saw $212 million in annual net sales from a lineup of roughly 10 products, Vogue noted last year, as the company announced its billion-dollar exit to Elf Beauty.

The Labubu craze then supercharged the category. Sales of the fuzzy monster bag charm grew revenue at Pop Mart, the Chinese retailer behind the product, to $1.8 billion in 2024 — a 7x jump from 2019. Demand for the Labubu itself has since faded, but the concept of the decorative bag charm has not. Today the category spans characters, bedazzled beauty products, and whimsical designs like Coach's coveted cherry charms, a Gen Z favorite.

Reactions to the Muse Charm, so far, have been mixed. The question is whether it is a playful device that makes AI more approachable to everyday consumers, or another flop in a line of AI hardware that never took off — the AI Pin, the Rabbit, the Friend pendant.

Many observers have compared the Muse Charm to a Tamagotchi, the pocket-sized digital pet that became a major toy fad in the late 90s and again in the mid-2000s. That reference is dated. The Charm looks more like a twist on what young people are already doing with the Apple Watch, repurposing older devices as keychains and charms — a trend fueled by TikTok videos showing different ways to use the watch when it is not on your wrist.

On Amazon, Walmart, eBay, and Etsy, thousands of Apple Watch keychains, straps, pendants, lanyards, clips, and bag charm cases are now available in nearly every style imaginable. These keychain watches are often adopted by younger women as a fashion accessory first, rather than as a piece of technology.

The Muse Charm also intersects with the broader retro-tech trend. Older tech — digital cameras, flip phones, iPods, CDs, cassette tapes, home phones, wired earbuds — is making a quiet comeback. Young people describe the addictive, algorithm-driven feeds and "soulless" nature of modern technology as making them feel more disconnected, which feeds the demand for tech they can touch and feel. One startup, Clicks, is even bringing back the physical phone keyboard in a BlackBerry-inspired device.

For Gen Z, these physical objects offer a sense of control over a world where technology has become so deeply integrated into daily life that it no longer feels like a choice. Young women have been at the forefront: some are crafting their own portable mini computers, "cyberdecks," fitted inside clamshell purses or custom cases and bedazzled with jewels, flowers, stickers, and pearls.

Being on-trend does not guarantee a hit. Meta has abused consumer trust over the years to such an extent that it may never fully recover. The company settled with the FTC over charges that it deceived consumers by making users' private information public without their consent, and has been penalized by the FTC for numerous privacy-related violations. In 2023, the FTC charged Meta with violating a privacy order filed after the 2019 settlement. Meta has also been repeatedly hauled before Congress over harms to minors, has lost or settled multiple lawsuits on the same topics, and has seen whistleblowers expose its practices.

Those careless privacy practices could cost Meta the battle to become the consumer AI of choice — unless consumers decide that the "devil you know" is better than the one they don't, especially when the alternative is companies warning that AI could put an end to the human race.

Meta's end game is highly targeted, highly personalized advertising. The company said it will monetize Muse by taking a small fee from transactions. If that is the privacy tradeoff for free AI, consumers may be willing to take the risk — and the Charm's fate will likely hinge on whether style outweighs the trust deficit.