Amazon Kindle Fire On Track For New 7-Inch Model While Adding 10-Inch Option [Rumors]

Amazon could be on the verge of reshuffling its tablet business by dropping its 8.9-inch model while providing a new 7-inch display alongside a 10-inch version of the popular Google Android based tablet.

According to Digitimes both Quanta and Foxconn will produce the larger slate. The report also points to E Ink receiving fewer orders which could signal that Amazon is moving further away from traditional Kindle readers as they have become outsold by the original Kindle Fire release.

It’s believed that the two new tablet models won’t be ready to ship until the second half of 2012, dashing earlier reports of a quick turnaround in product by Amazon with a model ready to ship in Spring 2012.

It’s believed that Amazon shipped just shy of four million Kindle Fire tablets in the fall, enough to make the company the leading Google Android tablet seller. Amazon’s price point of $199 was below the cost of manufacturing the tablet however the company’s model allows it to recuperate expenses through a specially designed Amazon app store and various other amazon products including e-Books.

Amazon financial reports show that the company lost half of its profits in the fall because of the Kindle Fire’s loss-leader pricing. Amazon is expected to offer future tablets with the same type of loss-leader pricing to ensure sales and future purchases of digital products.

Would you be willing to pick up a new 7-inch Amazon Kindle Fire or does a 10-inch Amazon Kindle Fire tablet sound like a better long-term investment?