Back in April 2021, Spotify announced its latest venture into the hardware space by offering a dedicated device that can play music and podcasts from its service in your car. This idea came to fruition in October 2021, when it revealed more details about Car Thing. The oddly named hardware was only available through a public waitlist until February 2022, when it became generally available in the U.S. with a price tag of $89.99.
Now, it seems that Spotify has decided to kill off Car Thing once and for all. In its latest quarterly earnings report, published today, the company talked about this move multiple times.
It told shareholders that it has decided to stop manufacturing Car Thing and that this decision had a negative impact on the reported gross margin. In terms of cash, this decision cost the company €31 million.
In a separate statement to TechCrunch, the firm noted that:
The goal of Spotify's Car Thing exploration was to better understand in-car listening, and bring audio to a wider range of users and vehicles. Based on several factors, including product demand and supply chain issues, we have decided to stop further production of Car Thing units. Existing devices will perform as intended. This initiative has unlocked helpful learnings, and we remain focused on the car as an important place for audio.
While existing customers will be supported for the time being, it's clear that the company is scaling down efforts on this side, which means that it likely won't be long before Car Thing bites the dust in terms of functionality too.
The demise of Car Thing can be attributed to the fact that it was a bit of a niche device anyway. Many modern cars already offer full-fledged infotainment and multimedia systems which integrate with your smartphone and make Car Thing a bit redundant. While it was designed to be dedicated piece of hardware to stream Spotify content, it's clear that there is not a large enough market for it, and this has inevitably led to Spotify cutting its losses and shelving the product.