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Jobs wants to sell books for sure -- but he also wants to sell music, apps, tv shows, movies -- and of course, more iPads. I seriously doubt that Apple has more to lose by accepting the Kindle app than they have to gain by it.
You can use iTunes to load music on the iPhone/iPod that you don't buy from Apple. There are many music apps like Pandora that compete with folks buying music from iTunes. I think this particular boogeyman is overblown.
Lee
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