Spotify has stopped making Car Thing, its in-car smart player, the streaming company said in its earnings report Wednesday (July 27).
According to the report, Spotify missed its gross margins in the second quarter of 2022, saying they were “negatively impacted by our decision to stop manufacturing Car Thing,” a move that will result in a $31.4 million charge.
A company spokesperson told TechCrunch that the goal of Car Thing was to “better understand in-car listening,” and bring audio to more users and vehicles.
“Based on several factors, including product demand and supply chain issues, we have decided to stop further production of Car Thing unit,” the spokesperson said. “Existing devices will perform as intended. This initiative has unlocked helpful learnings, and we remain focused on the car as an important place for audio.”
Spotify introduced Car Thing in April of 2021, describing it as a “smart player that fills your car with music, news, entertainment, and talk,” designed to address its users’ need for “a seamless and personalized in-car listening experience,” that aims to bring “our entire catalog of music and podcasts to a wider range of users across an even wider range of vehicles.”
At the time, the company said its focus “remains on becoming the world’s No.1 audio platform — not on creating hardware.”
Read more: Spotify Expects to Slow Hiring, Growth
Last month, Spotify CEO Daniel Ek told employees that the company will slow hiring this year by 25% due to deteriorating macroeconomic conditions.
The audio-streaming service had been on a hiring spree, adding 2,000 employees between 2019 through 2021 and bringing the company’s headcount to 6,617.
“While we have yet to see any material impact to our business, we are keeping a close eye on the situation and evaluating our headcount growth in the near term,” Chief Financial Officer Paul Vogel told investors recently.