Amazon is working on a video-streaming set-top box in time for the holidays, while details leak about two smartphones from the web retail giant

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SAN FRANCISCO -- Amazon.com is reportedly designing a series of new gadgets as the world's largest Internet retailer wades deeper into the hardware business to take on rival Apple.

Amazon is working on a video-streaming device in time for the seasonal buying rush that will compete Apple TV and the Roku set-top box, the Wall Street Journal reported Thursday.

Details also leaked Thursday about Amazon's long-rumored attempts to get into the smartphone business, where Apple's iPhone dominates.

Amazon is working on two smartphones -- one cheaper model that may be ready for this holiday and a more expensive device with a 3-D-type user interface that won't be released until next year, according to a post on Y Combinator's Hacker News website. TechCrunch confirmed details of the project, which is code-named "Smith."

An Amazon spokeswoman declined to comment Thursday.

Amazon has mostly focused on software and selling digital content and services, such as ebooks, video and music, rather than designing and selling its own hardware . However, the company may be realizing that to compete with Apple it needs its own gadgets because this is how to reach most consumers directly now.

"Amazon lost the music market to Apple and they are determined not to let Apple beat them again in these other areas," said Michael Pachter, an analyst at Wedbush Securities.

Amazon is particularly focused on the digital video market. The company announced Thursday that it green-lighted three TV pilots that may become original TV shows, depending on early customer feedback.

Amazon recently launched new tablets that allow subscribers to its Prime two-day shipping and video-streaming service to download videos onto the devices for viewing later, without the need for a Wifi connection.

"They are determined that they will not lose the TV and film market," Pachter said, while noting that the video download feature that comes with the new tablets is "appealing."

Smartphones may be more difficult for Amazon to crack, the analyst added.

"This is a hard business to start from scratch at this point," Pachter said.

Amazon denied a report in September that it was launching a smartphone this year.

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