A pre-market rumor on Thursday that Internet retailing giant Amazon (NASDAQ:AMZN) was about to be downgraded by analysts turned out to be false, StreetInsider noted. However, with its recently released Kindle Fire tablets set to vie with potential new iPad offerings from Apple (NASDAQ:AAPL), the rumors might only be a harbinger of things to come.

Last week, Amazon debuted new versions of its Kindle Fire — as well as other Kindle tablets — meant to confront the iPad in the battle for tablet market share

. Amazon’s high-end tablet, the Kindle Fire HD drew mixed reviews from experts, but comes with a wireless data plan that puts its total cost to users well below Apple’s iPad.

Amazon claims that sales of its 7-inch Kindle Fire comprise 22% of the U.S. tablet market. However, the company does not reveal specific sales numbers for the Kindle, and other industry monitoring firms say that the Kindle performed well during last year’s holiday shopping season, but saw sales slide later on.

Apple, however, is widely expected to debut a new smaller-screen iPad — the iPad Mini — some time next month. With iPads still dominating the tablet market, the iPad Mini could take a considerable bite into Kindle Fire sales, whatever they actually are.

Beyond Apple, the tablet market is heating up with a variety of tablets from manufacturers including Samsung, Microsoft (NASDAQ:MSFT) and Google (NASDAQ:GOOG) competing for consumer dollars. Apple sold 17 million 9.7-inch iPads last quarter. The addition of the iPad Mini is likely to only increase the company’s tablet sales, leaving less room in the marketplace for other players.

Amazon shares were flat in Thursday mid-day trading, while Apple shares edged up more than 1%.