Amazon has been ramping up production of the new Kindle, which will run on E Ink's display, the source said.
Amazon's Kindle e-reader has been popular, but readers have had to buy an external light to attach to the device to read in the dark. The front light eliminates that problem.
"I do see demand for a front-lit Kindle," said Jennifer Colegrove, Vice President of Emerging Display Technologies at DisplaySearch, an NPD Group company, which monitors trends in the display sector.
There is a trade-off, she said: "Front-lit will consume battery power and (it'll) run out ... quicker."
Amazon also plans to launch a new tablet closer to the holiday season later this year, the source said. The new Kindle Fire is expected to have a bigger diagonal display of 8.9 inches, bringing it closer in size to Apple Inc's iPad. The company did not respond to calls or emails seeking comment.
"We don't comment on our customers' launch plans," said Sri Peruvemba, Chief Marketing Officer for E Ink Holdings, the supplier of Kindle's ePaper technology.
"E Ink is an innovator and for the past 10 years, we have consistently delivered new products, major enhancements to existing products, and unique designs, so it is not surprising that there is constant speculation about what we will do next," said Peruvemba.
While Barnes & Noble was the first to market with a glowing e-reader, there has been speculation about Amazon being a close second.
Amazon will launch the new Kindle e-reader in the touch 3G and touch wi-fi versions, the source said.
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