There's been talk of an Amazon super-Kindle running Android OS since... about 5 minutes after Steve Jobs left the stage following the original iPad introduction. Now that Amazon has launched their Appstore (TM in contention), that talk is heating up again. And why not? It's an obvious play. I'd be surprised if Amazon hasn't had one in the labs for a while now (just like I would have been surprised if Facebook hadn't been working on a phone...)
Amazon has content like iTunes, including (in the US at least -- and more on that in a moment), ebooks, movies, TV shows, music, and now apps. They've made hardware before with the Kindle line.
But they're hardly the only one.