Amazon’s rumored tablet possibly due out this year will come with free streaming video service and be priced at around $399, according to a report from investment firm Detwiler Fenton.

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“It is particularly interesting to note that AMZN is expected to include its movie service for free for an unspecified amount of time to buyers of the device,” states the report, spotted Tuesday by CNET. “This is the same movie service AMZN already offers for free to its Prime customers.”

The Amazon tablet will reportedly feature a 10-inch color screen and “have a more robust applications processor” than the chip expected to power color Kindle ereaders that Amazon will also reportedly launch by the end of 2011, according to Detwiler Fenton.

The Detwiler Fenton report also corroborates some details reported earlier about the rumored Amazon tablet. It’s said to be due out before the end of the year and is codenamed Hollywood.

Reports from Taiwan in early May indicated that Amazon is ordering enough tablet components from Taiwanese manufacturers to assemble up to 800,000 units a month and plans to slash prices for its Kindles when it releases the tablet sometime in the second half of 2011.

Established tiers in the tablet market could shake out more fully in the coming months.

Detwiler Fenton expects low-priced color ereaders to fill a “low-end tablet niche” situated well below the most expensive devices, particularly Apple’s iPad. In the middle will be sub-$400 tablets like the rumored Hollywood tablet, the investment house predicted, as pricing pressure builds on companies like Motorola and Research in Motion which make tablets that are similar in price to Apple’s but not nearly as popular.