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AFAIK there aren't any rumors.
Eink readers are about half their price of a few years ago, and as aforementioned the differences between Kindle versions is not that big. I'm still happy with my K2 a couple of years down the road.
Offhand I don't see why Amazon would have to go through the trouble of making its own Android tablet. If someone wants to read Kindle books on an Android device, they can run the Kindle app. Otherwise, why add to what will soon be a huge pile of Android tablets?
I also suspect that color epaper is at least a year off, possibly two -- and won't be so great when it arrives. As such I expect the K4 will probably be another eInk device with incremental upgrades, and the K5 will be color.
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