Amazon is believed to be planning a 9-inch version of the popular Kindle Fire tablet, which will be released in the middle of 2012.
Chad Bartley - an analyst at Pacific Crest - told investors that, following checks with Amazon's component suppliers, the company will release a 9-inch Kindle Fire later this year, which would compete closely with the Apple iPad 3.
Stated in a research note sent to investors, Bartley - reported by AllThingsD also believes that adding a larger model to the range will boost sales for the year from a predicted 12.7 million units to 14.9 million.
The prediction does correlate with a report by DigiTimes, which stated that Amazon would start production of a larger Fire in May.
The current Kindle Fire has a 7-inch screen and is not specifically designed to take on the 10-inch Apple iPad, but a larger Kindle could certainly take the fight to Apple with what would almost certainly be an aggressive price.
Amazon prices the Kindle Fire at just $199, compared to the iPad, which starts at $499; a larger Kindle Fire would still be considerably cheaper than the similarly-sized iPad 3, which is expected to be announced in March.
The Kindle Fire is only available in the US, while the Kindle ebook reader is available internationally. The original Kindle was also US-only and the device was only sold internationally from the second generation onwards; Amazon is widely expected to follow a similar strategy with the Kindle Fire.
Amazon needs to start selling a larger range of product internationally if it is to take on Apple; the Kindle Fire has been Amazon's most successful product since it was launched in October, selling an estimated six million units in the last quarter - but this is small fry compared to Apple, which shifted 15.43 million iPads.