Amazon is indeed looking to build a credible iPad 2 competitor according to "upstream" sources based in Taiwan who normally receive orders well in advance for components.
Digitimes notes that Quanta computer, one of the biggest OEMs from the island, received orders from Amazon for the tablet which will use display components from E Ink Holdings.
The Taiwanese company is expecting to ship up to 800,000 units during the peak season towards the end of the year with initial shipping dates starting as early as July 2011.
Interestingly, the Quanta source said that the company expects the device to contribute as much as $3.5 billion to the company's annual revenue which, we suspect, is not totally correct given that Quanta will have to produce at least 10 million Amazon tablets in the six remaining months of 2011 to reach that number, something which is not likely to happen.
Quanta is looking to add Lenovo to its portfolio of tablet customers and wants to get them onboard to produce their next generation LePad (ed: we had a prior view of the Ideapad S1 which is set to come later this year).
Digitimes' report mentions that Amazon has been successful with the Kindle, its ebook reader, only in the US and Europe but hasn't been able to conquer a significant market share elsewhere.
One possible strategy Amazon may be looking into is to cut the price of the Kindle, flog it as a tablet lite, and then push a proper tablet device capable of rivalling the iPad 2.