Amazon will release an Android-powered device with a 9-inch display but no camera by October, according to a Wall Street Journal report Wednesday, citing unnamed sources familiar with the matter. Users would be able to watch videos, listen to music or read books bought from Amazon.
Amazon CEO Jeff Bezos hinted at an iPad rival coming out when he told a Consumer Reports interviewer in May to stay tuned in response to a question about the possibility of the company launching a multipurpose tablet device.
With Amazon entering the tablet war, it raises the question of whether this new tablet product will kill Kindle sales. In the Consumer Reports interview, Bezos indicated the introduction of its own tablet wouldn't spell the Kindle's doom. He said the company will always want to have a dedicated reading device.
Some recent studies suggest Bezos' hopes are well founded. A Pew study last month found the number of US adults owning an e-reader doubled from 6 percent to 12 percent between November 2010 and May 2011, while tablet penetration during the same period only increased from 5 percent to 8 percent. And even with the release of the iPad 2 and a flood of new competitors since January, tablet ownership has only increased 1 percent during that time.
Also, there are differences in how and where e-readers and tablets are used. Tablet owners are much more likely to use their devices in the living room while watching TV, while e-readers rule the bedroom nightstand because they can be more easily held in one hand.
The Kindle with Special Offers, both the Wi-Fi and 3G versions, have become popular with consumers since debut this spring. They are now the top selling models, according to Amazon's own list of electronics best sellers. Users get a lower-prices version of the Kindle in return for receiving advertising and deals delivered via a screensaver and a band at the bottom of the device's home page.