Amazon to take on Apple with own 9-inch Android tablet by holidays

Citing people familiar with the matter, the Wall Street Journal said Wednesday that the online retailer plans to base the device around "a roughly nine-inch screen" and Google's Android operating system. It won't, however, design the tablet in-house and will instead be "outsourcing production to an Asian manufacturer."

Amazon in recent years has stepped up its efforts to combat Apple's iTunes ecosystem with its own array of digital media stores for musics, videos, digital books and apps. To this end, its new tablet will let customers watch movies, read eBooks and listen to music they purchase or rent from Amazon.com rather than iTunes.

The device, planned for an introduction ahead of October, will reportedly lack at least one feature now found on iPads: a camera. It will also reportedly follow to market two updated versions of Amazon's popular Kindle electronic reader (review) that will arrive sometime during the current third quarter.

"The two new black-and-white Kindle electronic readers will use the same technology as in the previous Kindles, in which the screens mimic the appearance of ink on paper," the Journal said, citing people who have seen the devices. However, one will be a touch screen version while the other will be an improved and more affordable version of the current Kindle.

Amazon, which claims the Kindle is its best-selling product of all time, lowered the price of its ad-sponsored 3G Kindle on Wednesday to $139 from $164. An ad-free version remains price at $189.