Spotify hits the brakes on Car Thing, halts production of its only hardware

Spotify is no longer making Car Thing. The $90 device that connects to a car’s auxiliary power outlet, docks to the dashboard, and enables Spotify listening was doomed by a combination of limited demand and resource issues.

As reported by TechCrunch, Spotify revealed during its Q2 2022 earnings today (PDF) that it has stopped making the hardware. Spotify released the device to a limited number of subscribers in October and to the public in late February.

“Based on several factors, including product demand and supply chain issues, we have decided to stop further production of Car Thing units,” a Spotify spokesperson told TechCrunch.

The Spotify rep also told the publication that Spotify will support the Car Things already purchased, which “will perform as intended.”

You can still buy a Car Thing as of press time, with the price slashed to $50 as Spotify clears remaining inventory.

Spotify’s first hardware foray features a 4-inch touchscreen, Apple CarPlay and Android Auto support, and voice control via noise-canceling microphones. In addition to paying for the device, you also need a Spotify Premium subscription to use it (starting at $10 per month for one person), as well as a Bluetooth-paired phone using data or Wi-Fi.

While Car Thing was extremely short-lived, its demise isn’t completely surprising. Car Thing had a large, accessible screen and handy knob, but it didn’t add that much value over a docked smartphone.

Halting Car Thing manufacturing “negatively impacted” Spotify’s reported gross margins, which fell 24.6 percent when including the Car Thing charge of 31 million euros (about $31.4 million), Spotify’s earnings report said.

Spotify claims its first hardware efforts weren’t fruitless, however. Spotify’s rep told TechCrunch that the company used Car Thing to learn about how people listen to audio in cars, and audio in cars will continue to be a focus for the company. Spotify didn’t get more specific, and it’s unclear if the company will make another hardware play.

Spotify’s abrupt hardware U-turn comes as the heart of its business, software and content, continues to perform well. Monthly active user growth surpassed expectations by 5 million in Q2, growing by 19 million (19 percent) to 433 million.

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