This week, Amazon released a free iPhone app for reading eBooks made for its Kindle reader. It has so far received mostly favorable reviews for its execution and for the idea itself.

It would be easy to say that offering eBooks to be read on the iPhone would cannibalize Kindle sales. You could also object that the iPhone’s screen is far too small for reading an entire book. Yet in my view, this is a brilliant move by Amazon.

Amazon’s core mission is to sell content. While the Kindle is a real physical product for which they make a very real profit, the ongoing revenue model for Amazon is to sell eBooks. Kindle’s primary role is as a vehicle for those sales. The iPhone app allows Amazon to open another channel for eBook sales which costs them virtually nothing and removes a $300 barrier to entry for new customers.

Releasing any high-profile application for the iPhone is a publicity triumph. Kindle has received its fair share of media coverage, but no device in recent memory can match the iPhone when it comes to media affection. Any significant move made by a large company which credibly includes the iPhone as a major character in the drama is sure to generate plenty of press.

One of the iPhone app’s most telling features is the ability to synchronize bookmarks across devices. This presents a clear statement that the iPhone app can live harmoniously with the user’s Kindle, meaning enjoyment of your eBook is not an either-or proposition.

That’s where it becomes clear what a victory this is for Amazon. For any iPhone user who has already bought a Kindle, this rewards their purchase with a free option to continue enjoying their eBook in situations where they don’t have their Kindle handy. Even more importantly, it makes an excellent pitch to iPhone users who haven’t bought a Kindle.

There couldn’t be a better target market for the Kindle than a class of consumers who have demonstrated their willingness to buy an electronic device for three figures. By letting iPhone users try Amazon’s eBooks for only the cost of the book itself, Amazon lets the user sell himself on the idea of reading electronic books. As he becomes addicted to the convenience of reading nearly any title anywhere and concurrently grows frustrated with the iPhone’s tiny screen, the Kindle looks more and more attractive.

Any iPhone user who downloads the app and doesn’t buy a Kindle probably wouldn’t have bought one anyway. This gives those users the opportunity to become eBook buyers that otherwise wouldn’t have existed. For those iPhone users who have considered the Kindle, but for one reason or another have not bought one, this app gives a significant nudge.

I applaud Amazon’s iPhone release, and wish them great success. Well done.