Amazon Reportedly Making Premium Alexa-Powered Echo Speaker With 7-Inch Screen

Amazon.com is developing a premium Echo-like speaker with a screen, a sign the world's largest online retailer is trying to capitalize on the surprise success of its voice-controlled home gadgets and fend off competition from Google and Apple.

The new device will have a touchscreen measuring about seven inches, a major departure from Amazon's existing cylindrical home devices that are controlled and respond mostly through the company's voice-based Alexa digital assistant, according to two people familiar with the matter. This will make it easier to access content such as weather forecasts, calendar appointments, and news, the people said. They asked not to be identified speaking about a product that has yet to be announced.

The latest Amazon speaker will be larger and tilt upwards so the screen can be seen when it sits on a counter and the user is standing, one of the people said.

High-grade speakers will make the gadget sound much better than current Echo devices, this person also said. Amazon's new device is scheduled to be announced as soon as the first quarter of 2017, this person added. Amazon, based in Seattle, Washington, declined to comment.

So-called smart home gadgets are one of the latest computing battlefields fought over by the largest technology companies. However, they have so far failed to match the popularity of smartphones and personal computers. Amazon's hardware track record has been mixed too, with the disappointing launch of the Fire Phone in 2014. Its Echo speakers have been a surprise hit though, with Consumer Intelligence Research Partners estimating US sales of more than 5 million units since 2014.

Amazon's planned expansion of the Alexa-powered line coincides with growing competition from Alphabet Inc.'s Google Home speaker and Apple Inc.'s interest in building a home device using its Siri digital assistant.

(Also see: The Amazon Echo Already Has a Competitor in China - The LingLong DingDong)

The new Amazon device will use an optimized version of Fire OS, the software that runs Amazon's Fire tablets and Fire TV set-top box. The gadget will still respond to verbal commands and spoken questions, just like current Alexa devices. Amazon is also testing a feature that allows users to pin items such as photos on their speaker's screen akin to physically placing items on a refrigerator door, one of the people said.

Amazon plans to keep selling the Dot, Tap and Echo speakers that are typically stationed in living rooms and bedrooms, one of the people said. The current speakers cost $50, $130 and $180, respectively, while the model with a screen will likely be priced higher, the other person said.

(Also see: Amazon's New Echo Dot Speaker Is Both Better and Cheaper)

Some reviewers panned the current Echo for poor audio quality, which is partly due to Amazon designing it to sound better at moderate volume levels, according to one of the people. The new speaker will play high-quality audio at all volume levels, this person said. At least one prototype version of the device places the speakers below and behind the screen, they added.

The Wall Street Journal reported earlier this year that Amazon's Lab126 hardware unit was working on an Alexa-powered device featuring a tablet-like computer screen known internally as "Knight."

© 2016 Bloomberg L.P.