My own experience with the Kindle (I bought 20 books on it last year) and circumstantial evidence (Kindles being sold out half the time, other people who have actually used a Kindle loving it - although not all of it etc.) gives me reason to believe him.
Once you plunk down the $350, the itch to buy a $8 - $10 book that you just heard plugged by a friend you respect is simply too hard to resist. I have little doubt that Kindle owners are buying books more frequently and in large numbers. I think you still need a Kindle device for this iPhone app to work (not sure). Considering the fact that all the book lovers I know who hate the Kindle, love reading on their iPhones, if / when Amazon disconnects the two, this will accelerate.