Amazon.com Inc. (AMZN) and Apple Inc. (AAPL) have been competing in the ereader and tablet market for over a year now, since the iPad was introduced. On Friday, a report from Bloomberg mentioned that Amazon is now looking to introduce its own smartphone to take on the iPhone and some of the leading Android devices in the market.

A smartphone would give Amazon a wider range of low-priced hardware devices that bolster its strategy of making money from digital books, songs and movies. It would help Chief Executive Officer Jeff Bezos — who made a foray into tablets with the Kindle Fire — carve out a slice of the market for advanced wireless handsets.

Amazon has one of the most popular ereaders out on the market, the Kindle and is also leading the industry with some of its other products, including its cloud services and tablet computer, the Kindle Fire. The report mentions that Amazon is set to acquire a portfolio of patents that would allow the company to take steps in competing directly with some of the top competitors.

The rumored smartphone would likely borrow certain aspects of the Kindle Fire, including features such as purchasing books, magazines, and newspapers from Amazon’s store as well as using Amazon’s Cloud Drive as external storage. Amazon currently operates services that control a considerable portion of the digital content available online. By introducing a smartphone alongside its tablet and pairing with its online content, Amazon could very well present the iPhone with a serious competitor in the smartphone market.

{Via MacRumors}

It is very clear that Apple is closely watching Google’s moves in the music market place. And is making tentative moves to consolidate its position as the worlds digital content leader. But it is clear that Apple is eyeing an expansion of all of its own data services for its products and their users, they are not in a rush.

All of these services, be they related to financial transactions via your iPhone, more synergy and connectivity between iDevices, more music or more movies, all require something that is not ready yet. Apple’s huge server facility in the US, which is not online until 2011.

Apple realises that Google has a long way to go yet, before it can pull off a music service to rival iTunes. Or really bring a cohesive movie viewing / downloading service to your living room. And because of this Apple are taking their time to line up the right services for music, movies and TV. As well as watching to see which way Google ultimately goes, and probably flounders.

According to several sources, the work done at Lala shortly after Apple took it over was more in the direction of video than audio. And Apple has not made any major moves to obtain rights for a more flexible license for music or movie ownership, yet. But movie execs. have been speaking of a set of “digital shelves” that consumers can purchase content for. The idea being that they own the rights to view the content for life, and not a physical DVD. Rather like iPhone apps, Steam Games, or eBooks, which you move from device to device, but always keep the rights to use.

Needless to say the legal side of this will all take more time to work out than either the construction of Apple’s server farm, or for “The Hobbit” to be made into a movie.

So if Apple get an Apple TV to us this year (something I doubt), or roll out any kind of music service, expect it to be limited at first. But perhaps growing through the second half of 2011.

Does Apple’s rumoured plan sound appealing to you? Let us know your view in the comments…