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Amazon to debut LCD tablet to compete with Apple's iPad later this year

Rumors continue to swirl about a new touchscreen tablet from Amazon with a full color LCD screen, with the latest report stating the device is set to launch and take on Apple's iPad in 2011.

Amazon recently placed orders with Quanta Computer, and also has plans to partner with E-Ink Holdings for its forthcoming touchscreen tablet, Taiwanese industry publication DigiTimes reported Tuesday. The new device is expected to have an LCD touch panel display with fringe field switching technology.

The device is expected to begin shipping in the second half of 2011, with the initial order pegged at between 700,000 and 800,000. The device would be a shift from the current e-ink based Amazon Kindle, which offers long battery life but displays in black and white.

Sources reportedly said that the Kindle still has strong sales, but Amazon has had trouble finding success with the device in markets outside of North America and Europe. The retailer reportedly plans to reduce the Kindle's price to attract demand from the education and consumer market, and its forthcoming tablet PC will leverage its software and content to take on Apple and the iPad 2.

Amazon recently reduced the price of its e-ink-based Kindle with a new ad-supported model that sells for $114. The device comes with a $25 discount in exchange for ads being displayed on the bottom of the home screen and screensaver.

In March, Amazon began courting developers on Apple's iOS platform, which powers the iPad, to begin making applications for Kindle. While the Kindle is more of a single-purpose device focused on reading, Amazon is said to be interested in selling a more multi-purpose unit, like the iPad, that could play music, movies, and other content sold by the retailer.

Rumors of Amazon's tablet persist as two other companies, Barnes & Noble and Lenovo, are have set their sights directly on the iPad. Barnes & Noble's Nook Color was recently updated to support applications for Android and carries a low $249 price, while Lenovo's forthcoming tablet is said to sport Android 3.0 and an iPad-matching $499 starting price.