More Amazon Tablet Rumors: May Ship This Year, Target iPad

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It’s no stretch to consider that Amazon could really shake things up with a tablet just like it did with its Kindle e-book reader. And it’s looking more and more like an Amazon tablet will be an inevitability.

Word out of the Far East is that the Seattle-based retailer has placed tablet production orders with Quanta Computer, a company that’s built notebooks and tablets for many of the big household brands on the market today: Apple, Dell, Gateway, HP, Lenovo, and Sony, to name a few.

It’s believed that the tablet may start shipping “as soon as the second half of 2011″ on a scale of up to 700,000 to 800,000 units each month, and could add a total of $3.5 billion to Quanta’s 2011 revenue, according to DigiTimes. This is looking like a big project, in other words.

There’s been some curiosity about how such a tablet would be positioned by Amazon. Would it be a low-priced 7-inch tablet/e-book reader hybrid similar to Barnes & Noble’s $250 Nook Color or would it be a full-fledged iPad 2 competitor? Or both?

This latest rumor contends that Amazon will use “its advantage in software and content resources to challenge iPad2,” while cutting the price of the standard Kindle e-book readers. That would make this tablet seem more like a full-fledged tablet than a tablet/e-book reader hybrid like the Nook Color.

The rumor also says that the tablet’s screen will leverage technology called Fringe Field Switching (FFS), which is similar to the In-Plane Switching (IPS) technology found in the iPad and Nook Color screens. The twist is that these screens will apparently be supplied by a company that’s well known for its work in electronic ink displays.

If true, that’d mean that electronic book reading would likely be one of this Amazon tablet’s big selling points. That shouldn’t be a huge surprise, as the company’s already made substantial progress with e-books. Amazon’s “advantage in software and content resources” will be the most interesting piece to the puzzle, though. It’s got e-books covered already but the Kindle’s hardware isn’t powerful enough for much else.

A full-on tablet would theoretically promise e-books, Amazon’s video on demand service, its music store (and cloud-based music player), and its new custom-curated Android app store. The biggest question now is what form factor such a tablet would take on and how much it’d cost.

You’ve got 10-inch Android 3.0 tablets now hitting a starting price of $400 and the 7-inch Nook Color at $250. I love the 8.9-inch form factor and would welcome an Amazon tablet that’d spilt the difference at $329. We’ll see what happens, though. We’re likely a long ways off from any sort of official announcement, and that’s still assuming these rumors ring true.

More on TIME.com:

Amazon May Build an Affordable Tablet with Apple-ish Personality

The Music Wars Continue: Amazon Lowers MP3 Prices to 69 Cents

Apple Beats Google in the Race to the Music Cloud

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