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Spotify Prepares to Battle Apple Inc. With Its Own Smart Speaker

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Spotify could finally be getting into the hardware business. Today, Music Ally spotted three job listings on Spotifyjobs.com with the word "Hardware" in the position's title. The listing for "Operations Manager - Hardware Product" states that the streaming-music service is "on its way to creating its first physical products."

Until now, the massively popular music streaming service has relied on other company's products to get reach users. Spotify is available in desktop, web browser and mobile-app versions, while Spotify Connect is supported by products from companies as wide-ranging as Amazon.com, Inc. (NASDAQ: AMZN ), Sony Corp (ADR) (NYSE: SNE ) and Ford Motor Company (NYSE: F ).

But while Spotify is available on Apple Inc. (NASDAQ: AAPL ) Mac and iPhones, Apple's HomePod smart speaker currently only supports Apple Music. Further, Apple Watch also does not support Spotify integration.

This is significant, because while Apple Music currently has 30 million subscribers - which pales in comparison to Spotify's 70 million paid subscribers and 140 million active users - Apple Music is projected to surpass Spotify's U.S. users by this summer. The day could soon come when Apple no longer needs Spotify on any of its devices.

Spotify Defends Itself in the Streaming Wars

What's more, Amazon, Google and Apple drop and add each other's services to their devices almost at random . And if Amazon or Google - or both of them - ever decided to drop all but their own music streaming services (Prime Music and Google Play, respectively) on their devices, Spotify could be left behind.

Netflix, Inc. (NASDAQ: NFLX ) is in a similar situation, but it has created a moat by producing more exclusive content and offering more of a selection than its competitors - so companies will continue to need to offer Netflix to attract users.

When it comes to streaming audio, Spotify is similar to Netflix in terms of popularity and selection. But the company's initial public offering is in the works , so it needs to look good to prospective investors. By building its own hardware, Spotify decreases the likelihood of becoming a casualty of the streaming wars.

This is likely all defensive, however.

It's unlikely that Spotify would ever go on the offensive and pull support for Spotify streaming from all but its own speakers. The ability to stream music from smartphones and computers is vital to Spotify's survival.

Directly striking Apple, Google or Microsoft Corporation (NASDAQ: MSFT ) would be a downright stupid move. (Personally, I know I would cancel my Spotify Premium subscription if it suddenly stopped working on my phone, work or home computer.)

Vital Questions Surround Spotify's Hardware Venture

So far, it's unknown whether the Spotify speaker will have any sort of 'smart assistant.' But while Amazon, Google and Sonos still support Spotify and long-time Spotify partner Facebook also gets in on the smart speaker game , Spotify has some breathing room.

As of yet, there is no indication when the Spotify products will be available, or even what they will be, but hiring people to oversee the supply chain for the products suggests that manufacturing will begin shortly .

As of this writing, Regina Borsellino did not hold a position in any of the aforementioned securities.

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The post Spotify Prepares to Battle Apple Inc. With Its Own Smart Speaker appeared first on InvestorPlace .

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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