This article on Forbes asserts that Kindle already has competitors:
The ability to grab free books online points to the deviceâ€™s real competition: not paper books but Internet-friendly laptops, tablet computers and smart phones. The amount of content available online is growing fast, and devices for accessing the Net are getting better and cheaper quickly. One such device is already here. Itâ€™s called the iPhone.
Another post on Counter Notions claims that the big issue will be the DRM content:
iPod users have had an easy way to populate their devices, without having to repurchase most of what they have already paid for or illegally downloaded.
Kindle users, however, will have to purchase or repurchase all the content on their reader. Whereas it was possible to pay $399 for an iPod and enjoy all the music you wanted legally or illegally without any additional expense, not so with Kindle.
For my purposes, iPhone will likely serve me well. It’s already replacing my laptop for most of the things I use the laptop for (casual browsing, checking email) leaving the laptop to be used for document editing, instant messenger and detailed web searches. The screen is 40% smaller (which is a lot) but the device is only half the weight. Battery life may be an issue where the Kindle wins out.
Will Apple see the need to respond? Will Google assist them with their online content much like they gave them access to Maps?