Kindle and iPhone make love, not war - until Apple "iPad" arrives

Following the introduction of an improved Kindle device last month that packs a large screen suitable for reading newspapers and magazines. In addition to books, Amazon has also unveiled iPhone-optimized version of the Kindle Store reformatted for a better appearance in the mobile version of Safari browser.

It is this intentional invitation of the iPhone platform to Kindle's territory that is worrying some Amazon fans who even spell doom for Kindle as a result of this. In reality, Apple's iPhone can only dream of replacing Kindle for reading e-books on the go.

Steve Jobs: "Books are dead." Seriously?

In fact, Amazon's smash success with Kindle probably makes Steve Jobs wishing he never spelled doom for books.

"It doesn't matter how good or bad the product is, the fact is that people don't read anymore," Apple CEO told NY Times mid-January 2008. "Forty percent of the people in the U.S. read one book or less last year. The whole conception is flawed at the top because people don't read anymore."

While iPods and iPhones do support Audible's audiobooks [available for purchase in the iTunes Store], the self-proclaimed consumer electronics giant never dipped its toes into e-books out of Jobs' conviction that the art of reading is dead. This is why Apple has been lacking thus far a device specialized in consuming electronic books, by simple omission of one field where Apple excelled in the past: educational institutions.

In this regard, however, Amazon's Kindle for iPhone application won't change anything.

Cumbersome buying experience

Purchasing e-books from the Kindle Store on your iPhone or iPod touch is too cumbersome for an average user due to the fact that purchases are handled outside the app.

While Kindle for iPhone app lets you wirelessly browse the same online catalog of over 280,000 e-books that the Kindle device accesses, clicking the "Get Books" button kicks you out of the app and launches the iPhone-optimized version of the Kindle Store store in mobile Safari, where you make the purchase.

Then, you launch the app again so it can tap Amazon's 3G Whispersync technology to discover newly purchased items and sync them to the device over the air.

Due to limitations of the iPhone SDK 2.0, developers currently aren't allowed to sell additional content from within their apps.

The iPhone OS 3.0, which is rumored to arrive next week, will address the issue with the so-called In-App Purchase feature that gives developers ways to put content for sale on the App Store, like new levels in games or e-books. Apple provides an in-app purchasing mechanism that relies on familiar iTunes Store credentials used when you purchase an app in the App Store.

This also means that Apple takes 30 percent on the revenue that publishers make on in-app sales of additional content, potentially increasing the capital black letters on the profit side of Apple's accounting books.

That said, I seriously doubt Amazon would put nearly 300,000 e-books on the App Store that are already in the Kindle Store, let alone agree to sharing 30 percent of the e-books revenue collected from iPhone users with Apple.

This route is even less certain as Apple would most probably reject any app that connects to a third-party rival content store - if you thought that this was an Apple-only exclusive limitation policy, think again: even Microsoft's mobile application bazaar prohibits this...

The only alternative for Amazon is to create custom in-app purchasing mechanism that would enable direct Kindle Store purchases from within the application, using the company's One-Click Buying technology. Amazon and Apple negotiated and fought hard on the topic of single-click purchase patent in the past, but now both companies don't even mention the issue that was filling the titles of technology and business press for couple of years.

Continued on the next page: Why is Kindle better, Why Amazon supports the iPhone, Apple media pad to compete with Kindle.