We already have Kindle e-readers, tablets and in the not-too-distant future we might even have a smartphone. What about Kindle set-top box? According to a new report from Bloomberg, a Kindle TV device is currently in the works with a fall release target.

The news comes from three unnamed sources claiming they are close to the project. As with the nature of this kind of information, it is important to remember that it is just a rumor, at least until Amazon directly confirms it. Still, we can’t say we would be terribly surprised if this turned out to be true.

Over the years Amazon has greatly improved its Video on Demand and Instant Video options. Amazon also recently released 14 original series pilots, and has even secured streaming rights to hit shows such as Downtown Abbey. Combine all of this together with other Amazon services and apps and you have an ecosystem that would easily translate over to the set-top box market.

On the flip side, the set-top box is already pretty crowded with devices like the Roku, Apple TV, Google TV and even gaming consoles like the Wii U, Xbox 360 and PS3. Could Amazon do enough to set itself apart from the competition? Maybe.

If Amazon’s existing Kindle Fire strategy is any indication, if Amazon gets involved in this market space they will likely do so by making the hardware as cheap as possible and making up the difference through its services and apps. Such a product will also likely run on a forked version of Android like the Kindle Fire tablet line.

Of course Amazon’s video catalog is already available on a lot of other devices, so why would Amazon waste their money creating their own hardware? For the same reason as Google sells the Nexus line cheaply, people flock to the devices and that means more customers. More customers mean more service consumption, translating to more money in Amazon’s pockets.

What do you think, would you consider an Amazon-branded set-top box? Could Amazon compete with Google TV and other existing options?

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