The $60 price cut sharpens the price difference between it and over-sized sibling Kindle DX, which launched last month at $489. It also puts it firmly in line with the lowest-priced Sony (NYSE: SNE) Reader, which lists for $299; the touch-screen Sony Reader is $399 but can be found for $50 less at Amazon, among other locations.

Amazon said when it cut the price of the first Kindle that it was able to lower costs when it increased the number produced. This time around, it looks like a pricing tactic. Among other aspects, cutting the price is one way of subsidizing sales of more books—that $60 dollars can cover six $10 titles.

Update: Amazon’s reasoning this time (via an e-mail from PR): “We’ve been able to increase the volume of Kindles we’re manufacturing and decrease the cost of doing so.  Across our business at Amazon.com, whenever we are able to create cost efficiencies like this, we pass the savings along to our customers.”

Rafat adds: I was about to buy Kindle 2 yesterday; glad I waited a day! My Kindle 1’s screen broke down in travelling; methinks it actually broke down in my transcontinental travels because some “real” books were on top of it in my suitcase. For real.