I've installed devices that match your description in the past, and to be honest, it was a horrible user experience. If you could rely on WPS, it might not be, but then again, you cannot rely on WPS because tons of routers don't have it, or don't have it in an easily accessible way.
You will need to add some other communication port to your device for initial setup. These are your options:
A serial port
PRO: cheap and easy to add to pretty much any systems design, can also act as debug port
CON: lots of notebooks don't feature a serial port anymore - neither do smartphones. Also a pain to find a cable with the proper pinout, you would need to include a cable in package. Needs software (device drivers etc.) to run on the setup device.
An USB port
PRO: relatively cheap and easy to add to pretty much any systems design, can also act as debug port
CON: Will not be accessible from smartphones. Needs software to run on the setup device
A bluetooth port
PRO: available from smartphones and many notebooks
CON: relatively expensive to add, also not usually available on PCs and missing on some notebooks. Usually needs software to run on the setup device. Possible security problem if factory default peering parameters remain active - possible usability problem if they don't.
A WiFi hotspot
PRO: does not need additional hardware (except may be a button to turn this on and off). Does not need additional software - setup can be done through a browser.
CON: can become tedious if you need to set up multiple devices.
WPS WiFi setup
PRO: no additional hardware. Trivial setup
CON: needs a WPS capable router and a user knowing how to operate it. The UX problem here is: you don't ship the router so you cannot know which model it is and have to defer the user to the router's manual.
A LAN port
PRO: relatively cheap to add to any system that already features a WLAN port. Setup can be done through a browser. Additional usage scenarios where WLAN is not available.
CON: If your device is unable to display its current IP (obtained through DHCP or APIPA), it may be difficult for a consumer to find out which IP it actually got. You might need a PC programm for those cases that locates the device (e.g. through UDP broadcasts).
A keyboard port plus HDMI/VGA
PRO: Independent of any other device
CON: expensive because it requires substantial additional hardware on your board - (can be mimiced by using a USB-to-VGA adapter but that requires substantial driver programming). Also requires extensive wire setup by the user.
A card drive (micro SD etc.)
PRO: Easy to provision multiple devices
CON: relatively expensive, requires a matching card drive on the setup device plus card. Probably also needs software on the setup device.
NFC communication port
I think I've worked with all of the above before except NFC. My best experiences were with LAN ports - (in quite a few cases I never bothered to even setup the WLAN because the LAN cable was readily available, and why use WLAN if LAN is around...?) The steps required for setup are:
- connect device to LAN (usually in proximity to the WLAN)
- find device's IP
- configure device
- detach from LAN
A hotspot is also a good option, although you should be aware what this requires of the user:
- log off current WLAN (many devices do not support logging onto multiple WLANs simultaneously)
- log on to hotspot,
- configure hotspot with browser (IP is known),
- log off hotspot,
- log on regular WLAN again.
If I had the choice, I'd allow both methods of setting up the device. The LAN method is easier to do from a more traditional network setup (PCs etc.). The WLAN method is easier to do if all you have lying around is a smartphone. WPS is nice if it works, but more often than not doesn't.
In all cases: DO attach a sticker onto the devices' bottom stating the MAC address (or both addresses if it features LAN and WLAN), factory default hotspot IP address and passwords. Also make sure to add a "reset to factory defaults" button or button press procedure. In case things go wrong, any network technician should be able to set it up using that information.