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Mobipocket books can be sold, and most often are, with DRM. I think the general point, is that Amazon could sell "kindle" books for people who have Mobipocket Reader installed on their PC, vs. only to Kindle owners. They don't, because of the dedrm tools and conversion tools that would then let evil pirates (gasp!) read the books on their Sony Reader or Cybook.
My point is, they probably wouldn't lose a single Kindle sale if they did, and they would defintely gain more book sales.
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