Spotify Car Thing No More
Spotify has stopped making the Car Thing media player just nine months after launching the voice-enabled audio player. Existing Car Things will still work and the remaining stock is on sale for half the original $80 price, though shutting down production cost Spotify $31.4 million and hurt its margins in its latest quarterly earnings.
Not a Thing
Spotify debuted the Car Thing in a three-month limited release Spotify designed the Car Thing as a way to encourage and streamline access to its services. Spotify’s voice assistant relays requests from drivers, aided by a touchpad and joystick. ReadSpeaker’s VoiceLab tech provides the voice users hear when they say “Hey Spotify” or ask the AI to read any text on the screen. Spotify was very bullish about the Car Thing, even pushing software upgrades to allow drivers to make calls and play content from third-party streaming services. Despite that apparent optimism, Spotify decided that there wasn’t enough demand for the Car Thing to match the cost of manufacturing them, especially with the current global supply chain issues and inflation.
“Looking specifically at Car Thing, our decision to stop manufacturing the device was made based on a few factors. First, we tested a number of price points and we frankly haven’t seen the volume at the higher prices that would make the current product financially viable,” Spotify CFO Paul Vogel said during the company’s second-quarter earnings call. “Second, rising inflation and components costs, coupled with the expanded lead time needed to order parts has significantly altered the risk/reward of continuing to lean into further product development.”
The end of the Car Thing may mean Spotify is no longer interested in creating its own hardware, but the software capabilities of the Car Thing have a solid place in the company’s plans otherwise. For instance, Spotify began testing a new Car Mode for its mobile app to replace the “Car View” option that Spotify shut down right around the release of the Car Thing. The new Car Mode emphasizes using Spotify’s voice assistant, with voice search replacing the option to type out a request on the app when driving. The continued voice AI investment is also evident in Spotify’s purchase of synthetic voice startup Sonantic last month, a $92.5 million acquisition according to newly updated SEC filings. That’s before considering the company’s metaverse investment, buying an entire virtual island in Roblox’s digital world.