From the press release:
"We are excited to add this functionality to Kindle for iPad and Kindle for iPhone and iPod touch," says said Dorothy Nicholls, director of Amazon Kindle.
"Readers will already find some Kindle Editions with audio/video clips in the Kindle Store today - from Rose's Heavenly Cakes with video tips on preparing the perfect cake, to Bird Songs with audio clips that relate the songs and calls to the birds' appearances. This is just the beginning - we look forward to seeing what authors and publishers create for Kindle customers using the new functionality of the Kindle apps."
This likely signals that Amazon has decided to focus on books and software, rather than hardware.