Arguably the biggest tech news today involves the fact that Amazon has released a free iPhone app that effectively turns the device into a Kindle (without the hardware purchase). It's optimally designed to be used with an existing Kindle device (the iPhone app syncs with an actual Kindle if you have one) but doesn't have to be. Depending on your point of view this will either erode future Kindle sales or represents a kind of genius landgrab at the right time in the burgeoning eBook market.

The Kindle 2.0 costs about $350. It's a big improvement (in almost every respect) over the first version of the device and probably will be quite popular. Yet it's also a frivolous purchase for most at a time of recession. By creating a free iPhone app, Kindle has increased its potential market by millions of users. 

I would argue that the move is a smart one for Amazon to broaden its market and head off competition from alternative eBook readers on the iPhone. It may also be able to sell hardware Kindles if people are exposed to the experience and then decide the want the "real thing." 

It's a kind of classic "will we cannibalize sales" dilemma. According to comments in the WSJ this morning, Amazon apparently doesn't think it will hurt device sales (I agree):

[Amazon VP Ian] Freed said he is "not at all concerned" that making e-books available on other devices will cannibalize sales of the $359 Kindle. Instead, it will increase sales of digital books and the Kindle, he says. Amazon says it plans to release applications to read Kindle books on other devices, but declined to specify which ones.

Mr. Freed says he expects that users of the iPhone application would read their books for 20 to 30 minutes at most, after which eye strain or battery life might become a problem. 

Here's Amazon's release.