Amazon is set launch a colour eReader later this year.

That’s the skinny from industry watchdog publication Digitimes, which bases its report on industry insiders saying the manufacturers have been shipping in related parts.

The reports also says the new colour Kindle will come standard with multi-touch capacitive touch panels instead of the infra-red touch panels found on the current line of Kindles.

As TechCrunch notes, this puts Amazon in the slightly weird place of running the full gamut of devices from black and white eReaders to fully fledged tablets.

What isn’t clear is how going full colour will affect the eInk technology that makes Kindles so easy to use for reading.