Louis Lanzano/Getty Spotify CEO Daniel Ek.
- Spotify posted several job listings this week that suggested it's close to creating its first piece of hardware.
- The firm hasn't said what it's building, but a previous listing compares the new hardware to buzzy experiments like the Pebble smartwatch, Snap Spectacles, and the Amazon Echo speaker.
- A former Spotify employee told Business Insider that it looks like the company is preparing for a world where smart speakers upend the way we use apps and services.
- All of Spotify's biggest competitors in music also have voice assistants and smart speakers and Spotify needs to catch up.
- Those competitors are Apple, Google, and Amazon and all three are vying to become the first $1 trillion company - while Spotify is only just about to go public.
Spotify caused a lot of excitement this week after putting up job listings indicating it's about to build its own hardware.
The three postings don't give much detail about what the firm is actually planning. Spotify hasn't spoken publicly of its plans, and didn't immediately respond to a request for comment. There's lots of speculation that the hardware in question could be a Spotify smart speaker, and this is what we can glean from the postings:
- Spotify wants to build "connected hardware." This could really mean anything from a smartwatch to wireless headphones to a smart speaker.
- Spotify wants to build its product from scratch. One job listing mentions experience with "ODMs," or original design manufacturers, meaning Spotify wants to design its hardware product from scratch rather than slap its branding on a gadget built by someone else.
- It's absolutely about boosting Spotify subscriptions. Mentions of delivering the "optimal" Spotify experience points to an Apple-like strategy of launching a device that will encourage people to cough up more money for a monthly subscription.
An older job listing specifically compares the new hardware to Amazon's Echo speaker, the Pebble Watch, and Snap Spectacles. Alarmingly, two of those three products failed, with Snap writing down millions on its spectacles and Pebble shutting down.
Spotify can't afford a failure in hardware. Although it's reportedly about to go public, it has much less cash in the bank than its main rivals in music streaming, all of which happen to be vying for the title of the first $1 trillion company ever: Google, Amazon, and Apple.
But the risk of being squashed is exactly what's driving Spotify, according to a former senior employee who spoke to Business Insider.
Spotify is buying into the theory that voice will totally disrupt our relationship with apps
The former employee speculated that Spotify is making a smart speaker that will come with a voice assistant, in line with public predictions.
On the surface of it, this looks insane. Apple - which competes with Spotify with its Apple Music streaming service - just launched the high-end HomePod speaker with the Siri voice assistant. Amazon, which similarly has a music streaming service, has the Amazon Echo with Alexa. And Google, which owns both YouTube and Google Music, has the Google Home speaker which is also equipped with its Assistant.
Kif Leswing
Apple's HomePod speaker, featuring its voice assistant Siri.
That's three tech titans which have proprietary speakers, streaming services, and technology. Why doesn't Spotify just try and partner with one of the firms to make sure its services remain available via their speakers?
The former employee says it's about the wider ecosystem, and a belief that voice will radically change the way we use devices.
"In a new world of voice control, with a new interface paradigm, ways of interacting, a new app ecosystem, Spotify wants to make sure it stays relevant," the ex-employee said.
Translated: in the future, tech companies bet you won't just be prodding apps on your screen to make calls or listen to music. "Voice is a new user interface that has no visual element, like icons," the former employee said.
With Spotify's key competitors in music also launching their own hardware, there's a strong risk music lovers will just stick to whatever the default service is. If you buy the HomePod, for example, Siri will only play Apple Music by default. You can switch to Spotify but it requires additional manual fiddling - which isn't really the point of a voice-controlled speaker.
"There is no visual way of knowing if the music from my Alexa is coming from Spotify, Apple or Amazon," the former employee said. "And if the music is all the same on these services, why wouldn't users pick the path of least resistance and go with the 'pre-installed' music source on a smart speaker?"
"Without a visual user interface, how do I install apps? Would I even install apps? Isn't a voice UI inherently geared towards the hardware device itself? Meaning that the services on a voice-device almost automatically will come from the hardware manufacturer itself."
Monopoly is bad for consumers, and it's why early reviewers of the HomePod have criticised its locked nature.
"All in all, this makes Spotify concerned and having a seat at the hardware-voice-table is probably far more important than it was for mobile," they said.
"Here, iOS and Android both allowed for external innovation. The desktop computer was always open for innovation. But, as said, voice hides all paradigms we're used to. A voice UI will disguise brands and favor the hardware brand."