So long the big fish in the e-reader market, the next few months could hold the key to where Amazon takes Kindle next, with speculation suggesting its successor could launch this August.

Analysts are keen to pitch the supposed 'Kindle 2' as a direct competitor to iPad, although word coming out of Bloomberg this week suggests an initial hardware revision will retain the format's black and white setup.

Citing two people 'familiar with Amazon's plans', the new Kindle is reported to be 0.36-inches thick comparing favourably to iPad at half an inch - with a sharper picture and more responsive screen.

Dual strategy?

However, such talk goes against what the New York Times reported earlier in the year.

Back in February, the paper said Amazon was looking into incorporating colour LCD displays for any Kindle follow-up, with the retail giant having picked up start-up TouchCo, which specialises in clear multi-touch overlays for computers.

Indeed, there's the possibility that Amazon could well be hard at work on two flavours of Kindle, with the black and white reader Bloomberg claims is as good as confirmed being joined by a more accomplished, touch-based set-up with a colour screen at a later date.

Colourful future

PC World reported earlier in the week that Amazon CEO Jeff Bezos told shareholders that a colour Kindle is 'still a long way out', although he did admit to having seen 'several [colour touchscreens] in the laboratory, but they are not quite ready for production'.

He added, "The Kindle will compete with these LCD devices like the iPad by being a very focused product. Serious readers are going to want a purpose-built device, because it's an important activity for them."

Despite iPad notching up sales of 2 million in two months, Kindle still has a healthy userbase for an e-reader, having snapped up 66 percent of the e-paper market with sales of 3.3 million in 2009 according to DisplaySearch.

[source: Bloomberg]