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Amazon Strips Costs Out Of Echo Speaker Now Plasic And Cheaper Speaker

A tear down of the latest models of Amazons Echo smart speaker has revealed that the big online Company has moved to strip down component costs with their latest model costing up to half the cost of previous models to build.

The Nikkei Asia tear down revealed that the cost of the speaker was lowered by using older semiconductors and by employing plastic instead of aluminium for the body resulting in a manufacturing cost saving of $34.

It appears that Amazon is using the device as a means to profit not from sales of the product itself but by using it to lure users into signing up for recurring Amazon Prime memberships claims Nikkei Asia.

The product stripped down was the Echo Dot 4, a fourth-generation version of the Amazon smart speaker, with Fomalhaut Techno Solutions, a Tokyo-based research company revealing that the entry level model is a seriously basic speaker.

Amazon is now offering Echo models equipped with a liquid crystal display in the hope of gaining wider acceptance of its smart speakers. The Echo Dot 4 sells in Australia for $64 which is believed to be below cost.

The big retail group has frequently cut prices on other consumer goods and seems to be banking on widespread adoption of its gadgets in an effort to gain more online sales as well as sales of subscriptions.

The lower production expenditure is attributed to less-costly components and materials. For example, the model’s main semiconductor cost an estimated $5 and was made by Taiwan’s MediaTek. Semiconductor performance improves gradually every year, pushing prices of older components down. The price of Amazon’s Echo Dot 4 was cut by using an older chip whose performance hardly differs from that of the previous model.

The Echo Dot 4 has also done away with an audio chip made by a U.S. manufacturer and replaced it with a cheaper one made by MediaTek, while the memory component previously provided by South Korea’s Samsung Electronics has been replaced with a less expensive one from U.S.-based Micron Technology.

In addition, the Echo Dot 4 now has a plastic body, which cut the component price 90% to $1 compared with the earlier aluminium body.

Minatake Kashio, director at Fomalhaut Techno Solutions, said that Amazon has been trying to figure out how to reduce manufacturing costs for some time.

The Alexa AI interface in the speaker allows users to vocally order goods online and check delivery status. It also provides control of other Amazon content such as Prime Video and Amazon Music. Echo moves users from smartphones and PCs into a voice-controlled environment for online shopping and content consumption.

The subscription services sector — including content distribution — is not only expanding but seeing increased competition due in part to new demand driven by people spending more time at home amid the COVID pandemic.

The Echo is also being groomed to become the hub of electrical appliances as the internet of things (IoT) — which can connect everything from cars and cameras to vacuum cleaners and home lighting — becomes ubiquitous. As part of this effort, Amazon acquired Ring, a U.S. maker of IoT-capable doorbells and security cameras, in 2018. The company sells security cameras linked to the Echo.



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