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In an effort to shrink tweeter size beyond cone speaker technology, dome tweeters were first seen commercially in the mid-fifties. A dome tweeter allows the speaker diaphragm to be small, which improves high frequency extension, and the magnet structure to be large which means higher power levels can be reached. The original dome tweeter's diaphragm was made of a phenolic material (similar to some compression drivers of the 1920's).
Speaker manufacturers offer speakers with dome tweeters constructed of diamonds, silk, and titanium (just to name a few). Each has its own unique 'sound' so try to compare before investing in one. Out of all the tweeter designs, dome tweeters are the most prevalent today as they're easy to manufacture and handle lots of power.
Wrong answer.........this is not why dome tweeters become. You can make a cone tweeter just as small in diameter, there is nothing blocking this. THe reason for the dome is it allows for use with a larger voice coil and and allows the voice coil more control over the diaphragm to reduce break-up resonances. Power handling also increases with the larger voice coil.