One of the secrets to Apple’s success is the fact that it makes much of its profit on the various hardware items that it sells. iPhone, computers, iPads and accessories are the main engine for revenue, while software and services, huge businesses in themselves, take a back seat. Spotify has been watching, and understands that in order to up its margins to keep shareholders happy, then a hardware device must be in its future, and it looks like car audio is the choice.
While there are only rumors about the product it has in mind (more on this later), Spotify’s intent was confirmed thanks to a new job listing for Head of Hardware Commercial Development. The ad also states that the new employee’s efforts will be directed at the automotive industry.
Spotify has teased a new car hardware device for a while now. Last year, a Financial Times report suggested that the company was building an in-car music player with hardware development company called Flex. Then in May 2019, Spotify published a blog post revealing that it was testing a voice-controlled, in-car audio device in the US, which it called the “Car Thing.”
Earlier this year another ad was spotted where Spotify was looking for an experienced UI (user interface) designer for a project being called “the Car Mountain Bet.”
While you can see why Spotify might want to build some high-margin hardware, one has to wonder why it chose a piece for the car. It’s true that American commuters spend huge amounts of their day behind the wheel, but there are already numerous built-in choices for entertainment, from the radio, to satellite radio, to song playback from a smartphone.
Would car owners want to spring for another add-on car audio piece just to access one service? Is all the previous data about time spent commuting now upended because of Covid? Will people continue to work from home in the future? Regardless, it looks like a car hardware device is in Spotify’s future.