Amazon's Iphone app seems like it might cannibalize their Kindle business

No, it won't.

Thanks for the well-articulated and reasoned response, N. Do you have any reasons why this might be? Because I'm pretty sure it will affect Kindle sales.

I think the Kindle won't really catch on until it has a media/music player, color screen, and web browser. They would make a killing. It would be a cross between a netbook and an Ipod touch. Some books like text books, graphic novels/comics, literary magazines, and reference books aren't they same without full color graphics to supplement the text.

It might cost a lot at first, but I'm sure everyone would want it if it were the same size/thickness. The Iphone is way too small for me to comfortably read on it for any extended length of time.

I'm not so sure, personally. I think it might just allow them to sell e-books to a much wider demographic - the percentage of people with an iPhone / iPod touch is much greater than those with a Kindle... so it might just expand their business. I personally wouldn't want to read books on my iPhone, it's just too uncomfortable for me to read anything other than short bursts (blog posts, etc). Personal opinion.

@2 See Anthony's post above for why this app sucks.
But the fact is: The iPhone is not an e-book reader. Period. The Kindle app does not add anything to the iPhone that hasn't already been there. There are better e-book apps out there and they haven't killed e-book readers yet, why would this one? People don't want to read long spans of text on their iPhone. I can't see why anyone would see this app and go "oh, I guess I won't be buying that Kindle now." People who buy the Kindle buy it for a reason, and their reason isn't just so they can read text on a screen.

I read books on my iPhone. I only read the free ones, from 50+ years ago. I'm not saying it's the best thing in the world, but there is only so much tetris one can play. It's great for the bus, or while waiting for AAA to jumpstart you. I still like the feel of a book, but I read a couple classics I'd have never read otherwise. Not War and Peace, but shorter books work. It's actually amazing how quickly you can get through it.

I read my iPhone in bed before I go to sleep, since I also use it as an alarm, it's always next to me. Also, it has its own light source, so I don't have to keep my main light on.

I'm not in the market for a Kindle, because it costs money, and the data and text message plan is not cheap. Gotta cut corners somewhere. The only way I spend money on books is through late fees at the library (I look at it as my own way of contributing more than just taxes to them). I'm not going to switch completely to an electronic source.

*I've never even seen the Kindle.

Thanks for answering, N. Those are some good reasons; it'll be interesting to see how Amazon rolls this out.

@3. Do you have any idea how the kindle works? No? It's e-paper and it's rather remarkable. Look it up. wikipedia has a decent explanation. It's not a normal screen. Once the image is there, it requires no electricity to run. NONE. It's not just a tablet computer for books, it's an entirely new way of doing things. Which is why "adding color..." is not possible at the moment...
At least, that's the way I understand it, and will be terribly disappointed if I'm wrong when I finally get mine...
@Paul Constant as well. This is the reason for N's response, which I agree with.

@8,

I know about e-paper, and it is pretty cool, but I'd still prefer a real book until they can make a full color version of it.
Until they come out with some sort of hybrid of a modern lcd laptop screen and the low powered ebook, I'll just stick to my laptop and real books. I suppose I'm not their target market though. I have yet to play with a kindle in real life, so maybe I'll change my mind yet.

Until today, what sold more, Kindle books or iPhone book apps? I bet iPhone book apps by about a kajlillion. I bet Amazon sells more Kindle books in the next two weeks than they have in the past two years or whatever.