Amazon is planning on introducing a set-top box this fall

Amazon Instant Video for iOS (iPad screenshot 004)Amazon has been working hard to become a player in the tech hardware market. Not only has the Kindle tablets seen multiple redesigns in an effort to compete more closely with the iPad, but the online retail giant has also been rumored to be working on developing a smartphone. Today, Businessweek is reporting that Amazon will introduce a set-top box to compete in the living room arena…

According to Businessweek, unnamed sources familiar with the issue said that Amazon’s set-top box, which will be dedicated to streaming video over the Internet, plugs directly into the users’ television sets and offer complete access to the company’s expanded video offerings.

Businessweek’s sources claim that Amazon’s set-top box will compete with the likes of Roku, Apple TV, and Boxee, as well as Playstation 3 and the Xbox, all of which offer online video streaming capabilities.

The sources also claim that the device is being developed at Amazon’s Lab126 in Cupertino, Calif., which has been working on TV-connected devices for several years. Malachy Moynihan, who also served as Vice President of emerging video production at Cisco and worked for Apple for nine years, is running the project.

Currently, users can watch movies and television shows from a variety of pre-existing set-top boxes. However, this move would allow Amazon to put its service directly in the hands of consumers.

Presumably, Amazon’s set-top box will also offer users the ability to stream TV shows and movies from other services, like Hulu and YouTube, since Kindle Fire users can also access these apps on their devices. It will probably look similar to Apple TV, with the brand’s service being the prominent feature.

This begs the question of how Amazon hopes to compete in a market already filled with similar technology. If the past is any indication of what to expect from Amazon’s “Kindle TV,” the set-top box will be ridiculously cheap. It might even be free to Amazon Prime members.

Amazon boasts more than 140,000 movies and TV shows that users can rent or buy, including thousands of titles that Amazon Prime members can watch for free. Recently, the online retailer launched Amazon Original Pilots in an effort to drum up more interest in its media streaming service.

Would you replace your current set-top box with Amazon’s Kindle TV? How much would you pay for the device?