Drop the damn price.
$249 and a hell of lot more people would buy this gimped product.
Uh . . . so, no. With the possible except of the iPhone and iPad (and not really even there in either of those cases), Apple has not competed on price nor has decided it wants to own the market in terms of units shipped. It is fundamental to what Apple is as a company. And I prefer it that way, generally, as someone who is both in the Apple ecosystem and is a stockholder.
It is not about having your hardware or software in the hands of everybody. For them, it is about having great or at least good-enough hardware/software in the hands of a lot of people, and making those products good enough people will want to pay a premium for them. That is clearly what Apple does with Macs, and they are making more profit in total than any PC manufacturer by far these days. That is what they do with Watches, and there really are no other smart watchers that are competing in terms of profits, or even in number solds. Same point for the iPad.
The phone is different. It is in the one area where Apple seems to want to have a ton of skus, though none of them are what I would call cheap. Not counting size differences like "pluses", they sell five currently as new on their site--X, 8, 7, 6s, and SE. From $1,149 to $349. And it seems to work for them . . . enormously. My guess is that they deviate so much from the other product line decisions on the number of skus, because 1) they have already done a lot of the heavy lifting, as a couple of these were flagships from previous years; 2) the turn-over in phones is so much higher; I mean seriously, the fact that a substantially minority of Apple phone customers trade up every year, and a good majority every two to three years is crazy good for them; and 3) the hardware is good enough that you can seriously feel OK using a three year old flagship with current software. Mostly.
At the end of the day, how profitable is the Echo Dot? And perhaps just as importantly, how profitable would it be if they did not sell your data . . . which is somewhat Apple does not want to do, generally. I would guess not much. But Google and Amazon have a very different business model . . . and I own stock in both those companies, too. I am just not in their device ecosystems like I am with Apple. Generally love Gmail, though, and their own phones are near or on-par with iPhones, I think. I buy almost everything I can with Amazon. With Amazon, I am all about exact product selection at the lowest price . . . I would hate them telling me I can only buy two versions of a thing, especially at a premium. Let them all thrive, and we'll see who can outdo each other . . . but I see no reason for Apple to try to be one of them, or vice versa.