The latest market rumors indicate that Amazon is likely to launch a 10.1-inch Kindle Fire in the third quarter, while tentatively suspending the launch of a speculated 8.9-inch model.

Amazon apparently plans to simplify its product lineup to focus its competition against Apple's iPad, according to industry sources, who also added that the planned 8.9-inch model was originally to take on Samsung's Galaxy Note tablets.

Tablet PC orders from Amazon are expected to start gaining momentum at the end of the second quarter or in early third quarter, said the sources.

Including shipments of an entry-level as well as an advanced 7-inch Kindle Fire tablet, Amazon is expected to ship 30-40 million tablet PCs in 2012, the sources estimated.