Amazon Working on Android-Based Kindle?

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Amazon is reported to be developing a color-screen multi-touch e-book reader for some time now. Will this be an Android device, just like the Barnes & Noble Nook Color?

A color Amazon Kindle has been long in the making. Amazon currently produces e-ink screen e-book readers, which are great with battery life and great on the eyes (no glare!). However, with its main competitor, the Barnes & Noble Nook Color being an actual Android tablet (Honeycomb available after rooting), is Amazon rethinking its e-reader strategy?

Amazon’s Labs126–the outfit responsible for making the Kindle–is reportedly hiring Android developers, and currently has about several openings. While this might simply mean that Amazon is developing apps for Android, this can also hint of bigger things. There are speculations that Amazon is working on a color-screen Kindle with multi-touch capabilities powered by Android.

Will Amazon join in on the Android tablet competition? Competition in the tablet space is tough, with Apple capturing about 83% of the market in 2010. Still, the overall potential for tablets (and ebook readers) is still big. Amazon might still choose to go with its own operating system, but a more flexible OS like Android will give Amazon better opportunities at developing apps and attracting buyers.