How did they manage to reduce price by half (AFAIK) ?
Does Amazon subsidies echodot now?
They are cutting us a break, though:
"Something just for you As a customer who purchased the previous–generation Echo Dot, you can get a $10 Alexa Shopping credit when you order the All-New Echo Dot using Alexa Shopping. Order today through October 20 and a $10 Alexa Shopping credit will be applied to your account within one week after your new Echo Dot has shipped."
I.e. "Alexa, order me an Echo Dot"
Exactly my point. You have to buy something else to take advantage of the offer. That's not a break - it's like a BOGO slap in the face for 1st gen owners.
Another thing I thought of: There are a lot of people who didn't know they were "early adopters" until yesterday. The 1st gen was marketed as "available until sold out", adding urgency to the purchase. It just keeps getting better and better (read worse and worse). I will very seriously consider further purchases of Amazon products, so they will definitely lose money over this.
Re: volume, the original part was an OMAP3 which ceased production creating a supply nightmare. The new part is shared with other products, so the cost should be low.
Amazon does have immense negotiating power.