Spotify’s less-than-stellar quarter can be attributed in part to a decision to exit the hardware business. As part of its revenue data, the streaming service revealed that it was ceasing production of its Car Thing player. In a statement to Engadget, a company spokesperson pinned the decision on “several factors,” including customer demand and supply chain issues. The withdrawal has hurt Spotify’s gross profit.
Existing Car Thing units will still work as expected, Spotify said. The company said that despite its short history, it has still unlocked “useful lessons” from the device, and that the car has remained an “important place” for audio. You can still buy the Car Thing at the time of writing for $50 (less than the usual $90).
Spotify first shared the word Car Thing in 2019, but the final product didn’t reach the general public until early this year after several months of invitational sales. It was basically a Spotify player for cars that didn’t have streaming functionality, and it served as an informational experiment for the company. A low demand would not be surprising. Many cars can access Spotify via Android Auto, Apple CarPlay or built-in apps – Car Thing was especially useful for those with older vehicles who wanted an upgrade from music streaming but didn’t want to pair their phone.
The cancellation comes despite other positive signs. Spotify’s free and paid listeners continue to grow (to 433 million and 188 million users, respectively), and the shift to audiobooks and podcasts is paying off by lowering the relative cost of royalties for music labels. The demise of Car Thing theoretically helps Spotify focus on those successes and brace for a widely anticipated global recession.