“It’s official: The iPhone is more popular than Amazon.com’s Kindle. And not just in the obvious categories like listening to music, browsing the Web or the other applications where Kindle barely competes. Now, the iPhone is also muscling into Amazon’s home turf: reading books,” Andy Greenberg and James Erik Abels report for Forbes.

“Stanza, a book reading application offered in Apple’s iPhone App Store since July, has been downloaded more than 395,000 times and continues to be installed at an average rate of about 5,000 copies a day, according to Portland, Ore.-based Lexcycle, the three-person start-up that created the reading software,” Greenberg and Abels report.

MacDailyNews Note: Stanza is a free app for Apple iPhone and iPod touch.

“By comparison, Citigroup estimates Amazon will sell around 380,000 Kindles in 2008. Forrester Research analyst James McQuivey expects Sony’s Reader will sell only a fraction of that number. In other words, Apple may have inadvertently sold more e-readers than any other company in the nascent digital book market,” Greenberg and Abels report.

MacDailyNews Note: Greenberg and Abels don’t even mention the sales of eReader, another popular free digital book reader for iPhone and iPod touch.

“Stanza, like Kindle, lets users download new content directly to their device. It has a snappy interface that allows readers to flip through a book simply by tapping the edges of the page and responds far faster than Kindle’s poky E-ink screen, which takes about a second to turn pages,” Greenberg and Abels report. “Lexcycle currently offers only public domain books–most of which were published more than 50 years ago–and creative commons titles offered up without copyright by the books’ authors. The Kindle, by comparison, costs $360 and offers more than 180,000 titles, including new releases and best sellers at around $10 each.”

Greenberg and Abels report, “Still, Lexcycle’s chief executive, Marc Prud’hommeaux, says he’s working on deals with several major publishers–to be announced around the New Year– that would let Stanza sell newer e-books to its growing user base and split the revenue with the content’s owner. That would provide Lexcycle with a source of cash–and could put the iPhone toe-to-toe with Amazon. ‘Once we’ve got that kind of deal done,’ says Prud’hommeaux, ‘you’ll be able to do everything on the iPhone that you can now do on the Kindle: browse, purchase, download and read a book without interacting with your computer in any way.'”

More in the full article here.

[Thanks to MacDailyNews Reader “JES42″ for the heads up.]

Plus, as an added bonus, iPhone doesn’t look like something John Dykstra superglued together back in 1975.

It doesn’t matter how good or bad the product is, the fact is that people don’t read anymore. Forty percent of the people in the U.S. read one book or less last year. The whole conception is flawed at the top because people don’t read anymore. – Apple CEO Steve Jobs remarking on Amazon’ Kindle, January 15, 2008

Related articles:
Apple iPhone becomes #1 digital book reader; outsells Amazon Kindle, Sony Reader – October 02, 2008
Amazon’s Kindle a huge flop? – July 02, 2008
Apple working on OS X-based multi-touch Kindle killer? – March 03, 2008
Apple CEO Steve Jobs cooking up iBook (Amazon Kindle killer)? – February 05, 2008
Apple CEO Steve Jobs on Amazon Kindle, Google Android, honoring Bill Gates, and more – January 16, 2008
Mossberg reviews Amazon’s Kindle: ‘clumsy and poorly designed’ – November 29, 2007
Forbes: Apple’s iPhone may have already rendered Amazon’s new Kindle eBook reader obsolete – November 19, 2007