At first blush, it may be hard to understand why Amazon is releasing a Kindle app for the iPhone. Might that not cut sales of the Kindle? If you already own an iPhone, but have balked at spending $350 for Amazon's eBook reader, suddenly you have a solution.
And as the Wall Street Journal's esteemed Walt Mossberg has stated, it's a pretty good one. "The new Kindle app isn’t as full-featured as some other e-reader apps for the iPhone, which do allow annotation, searching, and so forth," he wrote last night. "But it gets the job done and it gives you access to Amazon’s large catalog, which contains more popular and current commercial titles than other e-book sellers offer."
Turns out that's a great thing for Amazon, though. Peter Kafka at AllThingsD explained why very succinctly:
That's why Apple has always made it difficult to move iTunes content to devices other than iPods (though it's a bit easier now that the music library is DRM-free): The margins it makes on music downloads is minimal. The sames goes for TV shows. The margins on some movie downloads are in fact non-existent, if not negative. Apple just wants you to buy its hardware, for which the margins are huge.
But eBooks aren't as bad a business for retailers as digital music and video. Amazon makes a healthy profit on each sale. And it's not really a hardware company. The Kindle is its way to stay relevant as the book market goes digital. The Kindle store is really where the action is at.
So if iPhone users have a way to access the Kindle store, Amazon is happy. And if some of them become convinced to buy the actual Kindle device for a much better reading experience, all the better.