Report: Amazon's Android tablet, touchscreen Kindle coming in Q3

Amazon.com will introduce its much-rumored tablet device in October, expanding the online retailer's digital content aspirations and further fueling its rivalry with Apple (NASDAQ:AAPL).

Citing sources familiar with the project, The Wall Street Journal reports the Amazon tablet will run Google's (NASDAQ:GOOG) Android operating system and boast a roughly nine-inch screen--unlike Apple's iPad, the device will not include a camera. Pricing and distribution details are unknown. Sources say Amazon did not design the tablet and that it is outsourcing production to an Asian manufacturer--one person familiar with the company's plans said it is working on another model designed in-house, with a release slated for sometime in 2012.

Unlike Apple, which relies on content from its iTunes digital media storefront and App Store to boost sales of hardware like the iPhone and iPod touch, Amazon is looking to the tablet to boost consumer interest in premium digital media. Sources say Amazon hopes customers will use the tablet to buy and rent music, movies, TV shows and e-books.

At the same time, Amazon.com must be careful to avoid cannibalizing sales of the Kindle e-reader, its bestselling device. Amazon now sells more Kindle e-books than hardcover and softcover volumes combined: As of April 1, Amazon consumers purchase 105 Kindle titles for every 100 print books. Sources tell The Wall Street Journal that Amazon plans to introduce two updated editions of its black-and-white Kindle sometime during the third quarter--one of the new Kindles will incorporate a touchscreen, a feature absent from current models.

The Amazon tablet will go head-to-head with Apple's iPad, the unrivaled leader of the segment with sales in excess of 19.5 million as of March 2011, as well as other Android-powered tablets. In recent months Amazon has introduced its own Amazon Appstore for Android and Amazon Cloud Drive streaming media service in an effort to boost its stature in the Apple-dominated digital content space--in May, the Amazon MP3 storefront dramatically undercut Apple's iTunes by selling Lady Gaga's new album Born This Way for 99 cents.

For more:
- read this Wall Street Journal article

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