Spotify bets on cars to generate profits
Spotify (SQUARE) – Get the Spotify Technology SA report and his media war with Apple (AAPL) – Get the Apple Inc. hits the road with the former showcasing Car Thing, its answer to its rival’s CarPlay.
Spotify first announced its first hardware product in April 2021, describing the device as a smart player that brings modern in-car entertainment to older vehicles.
The company tested the product in invite-only beta for the next six months before having a limited public release in October for $80.
Now, Spotify is selling the device to the general public for $90 apiece. The service requires a Spotify Premium subscription, which starts at $10 per month and caps out at $16 per month for up to six accounts.
What does Car Thing do?
In short, Car Thing is a USB-powered Bluetooth remote for the Spotify app on your phone. The device can be mounted on your vehicle’s dashboard, air vents, or on a bracket that fits into the unused CD slot of your vehicle’s stereo.
Once mounted and turned on, the device syncs wirelessly with the Spotify app and displays information about your music or podcast on its screen.
You can use the screen to browse your audio selections. The Car Thing also has a control wheel that can be rotated to scroll and tapped to make selections.
So basically Car Thing lets you use Spotify, and only Spotify, hands-free in your vehicle via voice commands and via the touchscreen and button.
Users only need to say “Hey Spotify” before giving the device a command to use the hands-free function.
Spotify says it hasn’t finished developing Car Thing as the device is launching in the US only.
Spotify enters an already crowded market
Apple and Google (GOOGL) – Get the Class A report from Alphabet Inc. are already on the market car streaming devices with CarPlay and Android Auto.
Both Android and Apple devices provide users with several streaming service options, including Spotify. So people who already own these devices will find Car Thing unnecessary.
Spotify also has competition from Amazon (AMZN) – Get the report from Amazon.com, Inc. screenless Echo Auto device, which relies solely on voice command to operate. And if you have a modern car that already supports Bluetooth or has an auxiliary input, using your phone would probably be more convenient.
However, Car Thing is great for older vehicles that don’t have these new features.
Spotify is at a turning point
Spotify has had a rocky start to 2022 after going through the Joe Rogan controversy earlier this year, but the company is expected to turn profitable for the first time in its public history this year.
Spotify’s entry into hardware production could be a big part of its strategy to boost profits this year.
The company is expected to report first-quarter results next May, with analysts still expecting a loss of 25 cents per share. However, for the rest of the year, Wall Street expects a profit.