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Amazon's Nook Color killer shipping soon?

Rumors that will soon unveil a 7-inch Android tablet continue to percolate. The new model will reportedly be designed to take on Barnes & Noble's Nook Color.

Rumors continue to percolate that will soon release a 7-inch Android tablet. CNET Asia

There's been a lot of talk in recent weeks about Amazon releasing an Android tablet to take on the iPad. But much less has been said about a smaller tablet, a 7-inch model, that the company has been rumored to have in the works.

Now Taiwan's DigiTimes, which we can't say is terribly reliable, is reporting that Foxconn will deliver the larger 10.1-inch Amazon tablet in early 2012 but that Quanta Computer has already begun shipping a 7-inch model to Amazon.

We've been hearing similar reports on that 7-inch model. A major app and content developer who wished to remain anonymous told CNET that Amazon was on the verge of announcing the 7-inch tablet "literally any day now" and that it would be designed to at least partially compete with the Nook Color. He added that he thought the 10.1-inch model would be released in time for the holiday season.

Of putting out the 7-inch tablet, "They have to do it," the developer said. "We've seen huge growth on the Nook Color. They're getting killed on color content by the Nook Color."

The developer also added that he'd been largely underwhelmed by this year's crop of Android tablets, saying they just can't compete with the iPad 2. He found the Nook Color underpowered and not suitable for certain apps but thought it would likely get a speed bump late this year.

"You really need a minimum of 1GHz processor," he said.

That's most likely what you'll get from a 7-inch Amazon tablet, which may end up being a stripped-down version (read: no cameras) of the Samsung Galaxy Tab that equals or even beats the Nook Color's $249 price.

It remains unclear whether a new Amazon 7-inch tablet, if indeed it's a real product, will be part of Amazon's Kindle line or part of a whole new tablet line. We'll just have to wait and see, but we're betting we'll see something sooner rather than later. Last year, Amazon announced the Kindle 3 in August.

We suspect that Amazon will have an easier time competing in the marketplace with Apple with an affordable 7-inch tablet than trying to go head-to-head with a 10.1-inch tablet that's only marginally less expensive than the iPad 2. What do you guys think?