While I follow your reasoning pilotbob, I can't ignore all the indications suggesting a new version of the Kindle. We know its been in the works..who knows how radically different it is in form or whether its the leaked version or not. But I doubt Amazon would make this sort of hype for a firmware upgrade when a new version of the Kindle has been anticipated for awhile.
I also think your points 3-4-5 still count as a new version of the Kindle, so we are actually in agreement. Although I think a larger screen will come later.
I think they are caught between a rock and a hard place. I've seen other mfg caught in a similar dilemma when winding down existing model production before the new models are ready resulting in periods of no inventory (specifically a time when you couldn't buy an HP printer for months). I would've have expected the wait time to not jump overnight to months if they were still producing. Keep in mind, this happened AFTER the Oprah deal was done and before the Christmas rush. We'd hear more about people still getting new Kindles as they came in. Likewise, they couldn't suddenly start producing the old version again to meet demand, if they had exhausted their supply of the old processor, etc..
My guess is that they release a new enhanced (at least in their minds) Kindle and the price goes back up to $399. People who have been waiting will get the new Kindle (with a faster processor) at the old Kindle price. Kindle 1 users get a major firmware upgrade. And there is a new Kindle for sale.
But I am speculating just like everyone else
