image Some six months after the Kindle came out, Amazon has dropped the price by $40 to $359, a ten percent reduction.

Was this in line with Amazon’s plans or the result of weaker-than-expected demand? Those are among the possibilities raised in a Silicon Valley Insider post—by Vasanth Sridharan—on the new low price. To be exact, might Amazon simply have newer, better models on the way, maybe even with touch screens? Or could the slowing U.S. economy be a factor?

So, gang, does the price reduction make you more likely to buy a Kindle? And what’s your own best explanation for the drop? Whatever the factors at work here, I continue to think Amazon could fare better with the Kindle if it respected industry standards and also dropped DRM.

Update, 4:37 p.m.: The word from AP: "Amazon spokesman Drew Herdener said Tuesday that Amazon’s cost of manufacturing the Kindles dropped as it increased the number produced. He would not say how many of the e-book readers have been sold to date."

A side effect of the drop: Not the best news for eBay speculators. The four buy-it-nows I see range from $340 to $449 without shipping.

Related: Q1 sales guesses and speculation on the future. Also see Google roundup on the price drop.

Also—if you’re interested in buying—see our Amazon Associates link for Kindle.

(Big thanks to Sam Hendrix for the SVI link.)