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I doubt many Kindle users bother or know how to convert and backup books. Closing off the ability to read media on non-Amazon devices is unlikely to hurt their sales much.The increasing shutdown of options for fonts, formatting and jail-breaking reinforces this. The Kindles are becoming increasingly simplified and closed and I would guess that the vast majority of Kindle users are not even aware of it.
Personally I see no issue with this. There are alternatives available to consumers who are uncomfortable with the direction Amazon is very clearly going in. That's the beauty of the market.
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