The new Echo will be both shorter and slimmer than the original, almost as if it were three or four Echo Dots stacked on top of each other, our source claims. Amazon is also softening its design with rounded edges and a cloth-like covering, rather than the current Echo's plastic shell and flat ends. And yes, it should sound better, too. The company is packing in several tweeters this time around, instead of just relying on one large tweeter and a woofer (for low end). The HomePod, in comparison, features seven tweeters, which is big reason why it sounded better than the Sonos Play:3 and the Echo in our brief demo.
Amazon is also improving the new Echo's microphone technology, though it's unclear how it's doing so. The current model features an array of seven far-field mics, while the HomePod has six and Google Home has two. Amazon might be able to make improvements to the software and acoustic modeling — that's how Google's speaker manages to pick up your commands with far fewer mics. But given that Amazon helped to pioneer the use of far-field microphones in a home speaker, I wouldn't be surprised if it managed to cram in some new hardware innovations. A smart speaker is only useful if it can accurately hear you, after all.
As influential as the original Echo has been, it's not aging gracefully against smaller, sleeker and cheaper competition like Google Home. Even as an Echo devotee myself, I'm not a fan of its large, cylindrical footprint. Apple's HomePod is also significantly smaller, and it packs in plenty of new technology that the Echo doesn't. At this point, it's clear that you can design a solid speaker that doesn't take up a significant amount of room.
We still don't know what the new Echo will cost yet, but it would be nice to see Amazon drop the price closer towards the $130 Google Home (which is now on sale for $99). The company could conceivably stick with the Echo's current $180 pricing, which hasn't budged since it launched. Even then, it'll still have a huge advantage over the $349 HomePod, which Apple is also positioning as a competitor to expensive Sonos speakers.
We've reached out to Amazon for comment, but haven't received a response yet. Our source also notes that some design elements might change by the time the new Echo is actually announced. But given that they saw a working unit that looked pretty polished, and Amazon is planning for a fall release, we wouldn't expect any significant changes.