According to the Wall Street Journal, which cited sources close to Amazon, the tablet PC is expected to have a 9in display and will run Google's Android operating system. It's likely it will run Honeycomb, version 3 of the Android operating system, which has specially been designed for use on tablet PCs.
However, the source said Amazon's tablet would not been designed by the etailer itself, instead it will be produced by an Asian manufacturer, and it will not feature a camera. The source did not know how much the tablet PC would cost either.
Amazon already offers an eBook reader - the Kindle - which has proved very successful as well as its own Android app store with software and now music and movies, although this is currently restricted to US users at present.
Amazon's announcement comes as Sony showed off its S1 and S2 tablet PCs at an event in London this week. The devices were not working prototypes but Sony did say they will launch in the autumn and will allow users to play playstation games on them, as well as being used as a remote to control household equipment such as heating and lighting and also offer the ability to 'throw' content stored on the tablet PC onto other devices in the home, such as TVs or HiFi systems. Sony did not reveal how much the tablet PCs will cost.