What's inside a "Hello Barbie" surveillance toy?

Mattel's Hello Barbie has a microphone and a wifi interface, and it transmits the phrases it hears to a central server in order to parse them and formulate a response. Mattel claims that the data isn't being retained or harvested for marketing purposes, and assures parents that they can make Barbie stopping eavesdropping on them at will. But does it work? (more")