It was widely reported here in San Diego that Amazon was here earlier this year for several days and was in discussions with Qualcomm. Shortly after it was announced that Qualcomm was investing $2 billion in a manufacturing plant in China. Coincidence? Possibly. I expect the plant to be up and running next year. I retired from Qualcomm several years ago.
It was also reported widely among the tech blogs and websites earlier this year that Amazon was looking for Android developers and there was strong speculation that Amazon was considering an Android tablet. And, as mentioned, there are strong rumors that Amazon will be opening their own Android app store.
This doesn't mean that this is where the Kindle is heading. It may just mean that this is where Amazon is heading after getting some experience in the manufacturing arena with the Kindle. It won't necessarily be a color e-reader but it may be the best touchscreen color tablet for e-reading and it will be Android based. It would also be multimedia capable to tie into Amazon's MP3 and video business. If Amazon were to release a new product this would be a logical next step.
I think a lot of people are being are being Kindle-centric and aren't seeing the big picture.
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