Rumor Mill: Spotify Working on New Smart Speaker?

MusicAlly is reporting the appearance of two new job listings for Spotify that suggest a hardware product will soon be launched by the company. There are also two other job listings, one for a senior product manager for hardware production and project manager for hardware production and engineering. None of these job descriptions indicates what type of product will be manufactured.

Will it Be a Smart Speaker?

The widespread assumption is that the new product will be a smart speaker to compete with Amazon Echo, Google Home and Apple HomePod. However, it could also be wireless earbuds or smart glasses. The Guardian reports:

Spotify is working on a line of ‘category defining’ hardware products and is ready to start setting up the manufacturing process. The streaming music company intends to create a hardware category ‘akin to Pebble Watch, Amazon Echo, and Snap Spectacles’, according to job adverts posted over the past year.

Spotify is looking to ensure it has distribution for content. A smart speaker makes sense, but keep in mind that Spotify has a tremendous global brand and large user base. It could use that brand to move into new consumer categories that go beyond music consumption. Facebook moved from social posts to images to messaging and soon to smart displays. The move into hardware by Facebook is an attempt to ensure distribution and exert more control over the consumer relationship. Spotify may see the same opportunity.

In addition, Spotify may see a chance to move into product categories with higher margins than its current music business. The royalty agreements imposed by the large music labels ensure that Spotify will never become wildly popular as a music business alone. However, if it can run other content at lower cost, Spotify can improve margins. And, if it had a sudden breakout hardware product, the company’s economics would change dramatically.

What About a Voice Assistant?

Any hardware product from Spotify is likely to include a voice assistant. That is the direction of most personal electronic devices today. SoundHound’s Hound voice assistant would be a good choice if Spotify wants to have complete control over the user experience and data. Hound also comes with music recognition so there is natural alignment.

If Spotify is aiming for a general purpose device, Alexa and Google Assistant are anxious to sign up new partners. This would offer Spotify access to the many other services and third-party voice apps on those platforms. That would help make the device more broadly useful and not an add-on to the household. However, a company like Spotify likely has a grander vision and will be reticent to become beholden to Amazon or Google for access to features, customers and data. Plus, both Amazon and Google are competing for the same music streaming customers as Spotify.

That makes Hound or a bespoke fork of the Mycroft open source software a more likely direction for the company long-term. Spotify may also conclude that offering a combination of a native voice assistant and a general purpose solution like Alexa is a good match. Either way, it would appear we are a long way from a product. What these rumors do reinforce is that the voice assistant and smart hardware battles have just begun. With Spotify’s strong global brand, user experience expertise and premium style, the company may just see itself as the heir to Apple for the AI age.

Why Facebook Wants to Sell Smart Displays? Attention and Agency.

Google Home Max and Sonos One Beat HomePod in Sound Quality in Head-to-Head Test

Mycroft is Growing Fast and Building an Agent so People Won’t Be Dependent on Silicon Valley Giants