My competitor noticed earlier today that the budget-priced Kindle is no longer quite so budget priced. The ad-supported model which sold for $69 is no longer available on Amazon.com, and not so coincidentally, the $89 international model is not available either.
Amazon has replaced the buy button for these two models with links to marketplace sellers which have them in stock - a telling detail, IMO. When Amazon runs out of an item, they usually tell you how long you will have to wait before new stock arrives. The absence of that estimated arrival time raises questions as to whether the models will be back in stock.
Update: The full priced basic Kindle is no longer available directly from Amazon.com, either.
Amazon is still selling the full-priced version of this ereader for $89 (and it is still in stock on several of Amazon's European websites), the stock issue with the ad-supported model has my competitor wondering whether Amazon is going to upgrade it with a new model.
I'm not so sure.
The thing we have to keep in mind with the basic Kindle is that it is designed to be the cheapest Kindle which Amazon could make. I don't see Amazon upgrading it, not unless the replacement can be made as cheap (or cheaper).
What's more, this Kindle model hasn't received a firmware update since January 2013. It's missed out on several major feature changes, including Goodreads integration. That suggests that Amazon is not investing in this model because they don't have any plans to keep it around.
In short, I think this model is on the way out.
If I were going to speculate, I would posit that either Amazon has decided they don't need a cheapie Kindle any more, or they could be planning to replace it with a Kindle Paperwhite whose price was knocked down to (say) $99.
Given the shrinking ereader market and the rise of reading ebooks on tablets and smartphones, I think the first possibility is the more likely one.
But this is pure crystal ball territory, so your guess is as good as mine.