The Internet of Things (IoT) is transforming all sectors by enabling traditional products to become smart and connected, capable of collecting, analyzing, and exchanging data. In parallel, Augmented Reality (AR) has emerged as a promising technology to support product design by offering immersive and interactive ways to visualize and iterate ideas. This paper presents an AR-based application developed to assist designers during the early ideation phase of IoT product conception. The system enables visualization of virtual objects and interaction with 14 sensor capability cards and 12 user experience elements. An experimental study involving 14 undergraduate engineering students was conducted to compare the proposed AR tool with a traditional 2D paper-based method, using two design cases: a connected bicycle and a smart window. Quantitative results from NASA-TLX and SUS questionnaires indicate that the AR method maintained or reduced perceived workload, particularly in terms of complexity and time pressure, while achieving usability scores comparable to or better than the traditional approach. These findings demonstrate the potential of AR as an effective and cognitively sustainable tool for enhancing creativity in early-stage product design.