Spotify Car Thing Crashes Into Reality As Production Hits The Brakes

Spotify Car Thing will not be part of the company's future plans, as the music streaming company has decided to stop production, TechCrunch reported. Released in February of 2022, the in-car audio hardware received a mixed reception and a lot of questions about its utility as a standalone audio accessory — particularly given that a smartphone can handle the music streaming responsibilities quite well on its own.

Starting with the set-up process, Car Thing only paired with a phone, and not with the car's console itself. The audio was streamed via the phone and then routed to the in-car infotainment system. It merely serves as a control dashboard for Spotify music streaming from your phone. And that begs the question: Why not just use the phone to stream it in the first place, instead of paying $90 for a gadget?

Spotify served some desired UI changes via Car Thing, such as larger buttons, and put touch controls on the backburner in favor of physical gestures via a large dial. But the Spotify mobile app already offers a Car Mode with similar UI tweaks to reduce distractions and make things easier while driving.

Plus, the Car Thing's screen doesn't support maps, which means you again return to your phone for navigation. A phone mount costs significantly less than Car Thing, and will let do you a lot more from the screen in your view. Spotify says Car Thing was a learning experience. Perhaps, it can finally dish out better playlists for car rides?

The decision to halt production of Car Thing comes at a time when Spotify struggles to maintain profitability. That's despite revenue from its ad-supported tier reaching an all-time high, according to its Q2 2022 Quarterly Shareholder Release, while its monthly active user figures also beat estimates to reach 433 million by the end of the second quarter. But Car Thing was an odd product from the get-go.

In its quarterly report, Spotify mentioned that "[T]he Reported Gross Margin was negatively impacted" by the company's decision to halt the manufacturing of Car Thing. The move cost Spotify approximately $31.35 million, bringing the gross margin down to 24.6%, while the adjusted gross margin without the Car Thing hit stands at 25.3%, as per the financial documents.

As for the rationale behind halting production, a Spotify spokesperson told TechCrunch that the decision was "based on several factors, including product demand and supply chain issues." At the time of publication, Car Thing is still up for grabs from the company's official website at $50 a pop, down from its original asking price of $90.

Spotify says existing units in the hands of customers won't face any impact, but there is no word on how long Spotify plans to continue supporting the hardware platform for its music services. With production shutting down, it is evident that Car Thing has run its course. And with it, Spotify's hardware ambitions have also taken a serious hit.