CNET

What's next for Kindle hardware?

Well, a credible source has told CNET that Amazon will unveil a second-generation Kindle Fire this summer and that it's targeting July 31 for a launch event.

While we can't confirm the date, there's been plenty of chatter about new Kindles coming soon. Most recently, DigiTimes, which has been pretty spotty on the rumor front, reported that Amazon was "considering launching" a new $199 7-inch tablet with a higher resolution 1,280 by 800-pixel display "at the beginning of the third quarter."

The DigiTimes article cited the usual sources in the "upstream supply chain" and talked about how Amazon would reduce the price of the current Kindle Fire to $149. It also speculated that Amazon's long-rumored larger tablet is still on hold but that new e-ink Kindles with integrated lighting were expected to be released alongside the Kindle Fire 2 (or whatever Amazon chooses to call it).

Our source didn't mention the higher resolution display but did say that the new tablet would have a camera and physical volume-control buttons (many users complained that the Kindle Fire only has on-screen volume controls).

No word on whether Bluetooth will be included, what processor will power the device, and whether Amazon will stick with 8GB of built-in memory and no expansion capabilities. It will also be interesting to see whether Amazon, as rumored, will attempt to subsidize the cost of the new Kindle Fire with an ad-supported Special Offers version.

In speaking with additional sources, it seems likely that Amazon will follow a similar product upgrade map to Apple, adding features along with design and performance improvements but maintaining the similar price points. For instance, we don't expect that Amazon will put out an e-ink e-reader for less than $79 (the current entry-level Kindle sells for $79). Rather, it will simply improve upon the existing $79 Kindle. (Of course, you can get refurbished Kindles for less than $79, but we're talking list price here).

Currently, Barnes & Noble's Nook Simple Touch with GlowLight , which has been on the market for a couple of months, sells for $139. Amazon is expected to introduce a new Kindle Touch that offers an integrated light at a lower price point. It may also add lighting to the entry-level Kindle.

For reference, Amazon launched the Kindle Fire and new e-ink Kindles in September of last year, though the Fire and Kindle Touch didn't ship until November. While it could wait to launch its next-generation Kindles closer to the holiday season, having devices in stores in time for back-to-school promotions seems like the more likely scenario, particularly with sales of Kindle devices reportedly ebbing and rumors of Apple launching the iPhone 5 early this fall along with a new iPod Touch and possibly even its own 7-inch iPad.

It's also worth noting that the landscape for the "value" tablet category has changed significantly since Amazon launch the Fire and made a splash with its $199 price. Back then Barnes & Noble's Nook Tablet and some smaller, no-name brands were its only competitors. Since then Barnes & Noble has come out with a $199 Nook Tablet and Samsung (Galaxy Tab 2 7.0) and others are offering more affordable, feature-rich tablets. (Lenovo, for example, is blowing out its older IdeaPad A1 for $149.99).

Perhaps even more importantly, after specs leaked online, Google is expected to announce its Nexus Tablet as soon as this week. According to the report, that Asus-made 7-inch model will be the first to run the latest flavor of Android 4.1, aka Jelly Bean, and will have a 1.3Ghz quad-core Tegra 3 processor, a GeForce 12-core graphics processor, front-facing camera, and 1GB of RAM. The IPS (in-plane switching) display will offer a 178-degree viewing angle with a resolution of 1,280x800 pixels. The entry-level 8GB model will reportedly retail for $199.

In other words, Amazon may not only have to match those specs but offer an additional feature, design, or price advantage. Stay tuned.