Retailing giant Amazon could be planning to muscle in on the TV hardware scene later this year, with reports from the US suggesting that its secretly developing its own set-top box. The news comes just a week after Amazon unveiled 14 pilot episodes from its Amazon Studios Division, which is dedicated to creating exclusive content for its own Amazon Prime service.

Bloomberg spoke to unnamed sources inside the company, and claims that Amazon has actually been toying with the idea of a ‘Kindle TV’ for several years. It’s believed that the project is now in the “later stage” of its development at the company’s Lab 126 in Cupertino, California, which is just a couple of miles down the road from Apple. That’s not the only Apple connection by the way – it’s also reported that the brains behind Amazon’s set-top box, Malachy Moynihan, previously spent nine years working for the iPhone maker back in the 1980s and 90s. As well as Moynihan, Amazon are reported to have recruited engineers from companies including TiVo, Vudu and Replay TV to assist with its new project.

A set top box would actually make sense for Amazon – the company has dove headlong into the TV with its Amazon Prime service. As well as its decision to pilot its own exclusive TV programs, the firm has also paid for exclusive rights to several popular shows (like Downtown Abbey, set to arrive next year) that should help to grow its audience. Building a set-top box would solidify Amazon’s presence in the home entertainment space, giving it a unique status of both hardware maker and content creator.

However, there are one or two reasons why an Amazon set-top box might be a bad idea. For one thing, the market is already flooded with boxes from the likes of Roku, Apple, Google and others, as well as games consoles and cable boxes that do much the same thing. Second, Amazon’s box would initially only stream content from Amazon Prime, until deals can be tied up with other broadcasters.

Presuming Amazon does make a set-top box, it’s likely that at least some of the Amazon Prime content would be reserved exclusively for its own hardware to tempt consumers – but seriously, just how many boxes do they think people are going to install? Much of Amazon’s content is already available through other manufacturer’s devices, and it’s hard to see what else they can come up with to make people go out and buy yet another TV box.

Most likely, the set-top box idea has come about from the company’s desire to compete with firms like Apple and Google. It’s no secret that Amazon wants to make a name for itself as a quality hardware maker following the success of the Kindle. Rumors have long circulated about an Amazon phone to rival the iPhone, and this unnamed device would be the company’s answer to Apple TV. But in what is becoming an increasingly flooded marketplace, Amazon will need to come up with something very special if it’s going to turn consumer’s heads.