This is due mostly to great improvements in cell phones displays (size and quality) plus east to use navigation means for them, and faster data connections to download content and better battery life for the above.
Aparently Amazon has announced that it will soon be making the content it has for the Kindle (230,000 titles) available for your cellphone. Which cell phones exactly remains to be seen.
That seems an admission that Amazon are happy in the "Kindle space" and don't plan to get into the hardware (at this point) of smaller, different devices but that they do plan to leverage the success of those devices, and the shear numbers of them appearing in the market to push their content business for content they already have and are selling for the Kindle.
It would be very slick if they allowed you to buy content ONCE and then to view on one device AND the other, and even synchronize your reading between the two via their service (so you can always pick-up where you left off), but I think I'm being to ambitious there.
When I hear more about these moves I'll keep you posted. Post a comment if you see anything before I do.
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