Apple is a major player in the multi-use device market. They appear to be poised to market a book-sized or larger tablet PC, sort of an overgrown iTouch. But with only WiFi and not 3G in this new unnamed device, I don't see it as a serious threat to Kindle, with the possible exception of folks who want to read magazines and newspapers. Most books don't need color; most magazines do, and even newspaper readers have grown used to some color. And if they want it badly enough, they will put up with what is sure to be much less battery time per charge.
One publisher who is in talks with Apple about putting ebooks onto the new tablet said this:
“It would be a colour, flat-panel TV to the old-fashioned, black and white TV of the Kindle.”
Wishful thinking, if you ask me. See above comment about downloading with an iTouch. Also, Apple has a killer design team and can do amazing things with the user interface part of technology, but extending battery length does not appear to be one of the things they do well; just ask an iPhone user what his one complaint is, and I'll bet it will be how often he has to recharge (another might be that the iPhone does everything else but it's not that great as a phone).
The good news is, there's no reason we can't have both kinds of eReaders. People will gravitate to whichever kind works for them. For some folks, that might mean having their cake and eating it, too. You could keep your Kindle at home and use your iPhone to read books for short spurts while you're on the road.
Plenty of room in this fruit salad.