According to reports, Amazon has tapped Foxconn to manufacture a 10-inch version of their popular Kindle Fire tablet, and you could have your hands on one pretty soon.

The reports comes from DigiTimes, who quote sources that say “Foxconn Electronics (Hon Hai Precision Industry) has obtained ODM orders for 10-inch Kindle Fire from Amazon and will begin shipments in the second quarter of 2012.”

The Kindle Fire sold well during the holiday season, as Amazon reported that it was their best-selling device. As the imminent launch of the iPad 3 looms, however, it’s expected that Amazon will cut their order for the 7-inch Kindle Fire in half. The biggest draw for many buyers of the 7-inch Kindle Fire was the $199 price point, and one wonders how they would be able to compete with the iPad in the realm of 10-inch tablet prices. A 10-inch Kindle Fire would surely have a lower price than the iPad 3, so it would directly challenge Apple’s dominance.

A recent study found that Kindle Fire owners were in no way as satisfied with their device as iPad owners (74% to 54%). The price was said to be the part users liked the most, followed by the screen and then the “ease of use.” Users’ disappointments with the Kindle Fire were lack of physical volume buttons, followed by poor battery life and lack of 3G. The smaller 7-inch screen size wasn’t mentioned, so it’s unclear as to whether or not it played a role in their dissatisfaction.

Every time Amazon sells a Kindle Fire, they lose a couple of bucks, as the manufacturing costs were revealed to exceed $199 by a few dollars. However, analysts have predicted that Amazon’s strategy of recouping those losses with app and media purchases will work – they say each Kindle could make Amazon over $100 in its lifetime.

Oddly enough, as rumors of a larger Kindle Fire appear, rumors of a smaller iPad continue to float around. Latest rumors say that Apple could be launching a 7-inch iPad Mini later this year on the heels of the iPad 3, which is expected in March.