Well, this is an interesting development. Sony have had their iPhone application rejected by Apple. Moreover, they've been told that they can no longer sell content, like e-books, within their apps, or let customers have access to purchases they have made outside the App Store. There's a New York Times article that goes into more detail. In many respects (with the wonder of hindsight) this isn't surprising. Apple have their own store, and the iBooks reader, and clearly they want to make money from it. It's easy to see how the Kindle app is something of a trojan horse for them; I've bought a lot of books for my Kindle and to read via the Kindle app. How many have I bought from iBooks? None.
I suspect that in the next few months we're going to see Apple really starting to push into the ebook area as they realise the value of this market - they can't do this by continuing to allow the Kindle app on the iPhone and iPad. Hopefully this also means that they're going to work to ensure that the iPad becomes a better reading device for books - I love it for magazines, but have to say that contrary to my own expectations, I do prefer the Kindle for reading. If the iPad is going to be designed as an entertainment device (which I think is what it does best), Amazon have to do something. I'd prefer to see greater encouragment in the area of the iPad for Dracula type of title, where the iPad comes into its own.
Of course - if Apple goes down this route, it's going to be a bit of a disaster for Amazon - that I can read a purchase on the iPad and iPhone is particularly useful, and one of the reasons that I finally decided to buy a Kindle. You simply cannot rely on a revenue stream that relies on the good will of a third party - particularly when that third party is a competitor. Amazon could offer to sell product via iTunes, or just give Apple a straight cut, but it's going to be really hard to police I would have thought. On the other hand, they may decide to deal with another smartphone company instead and decide to let Apple go it alone, in which case Apple has to hope that ebook reading isn't going to be a killer app that pushes people away from them.
I suspect that this is just an opening skirmish in what may well become a long and nasty war. There will be tears before bedtime.