Spotify said Wednesday it has stopped manufacturing Car Thing, the music streaming service's first and only hardware. Nearly a year elapsed between Spotify unveiling Car Thing and then fully launching it, only for the company to stop making it about five months after bringing it to market.
"We tested a number of price points, and we frankly haven't seen the [sales] volume," Spotify's financial chief, Paul Vogel, said on a conference call to discuss Spotify's second-quarter results. He added that "rising inflation and component costs, coupled with the expanded lead time needed to order parts, has significantly altered" the balance of risks and rewards to keep developing and making Car Thing.
For Spotify, the biggest streaming service by both listeners and subscribers, Car Thing was the first time it ever developed and manufactured its own hardware. The device mounted to an automobile's dash and functioned like a sophisticated remote control for listening to Spotify while driving, especially in cars that don't have fancy infotainment system built in to stream music.
When Spotify unveiled Car Thing in 2021, more than 2 million people signed up on its waitlist. The earliest people invited off the waitlist to try it got it free; by last fall, people had to start paying $80. In late February, it finally went on sale in the US, with a $10 price hike to $90.
But even as it launched, skeptics questioned the scale of demand for a device like Car Thing. Only about 22% of US consumers stream music in the car, according to music industry research company Midia, and Car Thing required users to pay for Spotify's premium tier to work. That excluded the much large pool of people who listen to Spotify free with ads.