ReadmillAbout nine months ago, the founders of Readmill noticed a trend was crystallizing. The makers of the popular book-reading iPad app kept receiving requests for an iPhone version. It was the most common request among Readmill users, and it just kept reappearing. Demand never slowed down; it only increased.

“We were like, ‘Jesus, this is going a lot faster than we thought,’” says co-founder and CEO Henrik Berggren, on the phone from Berlin. The startup had been planning an iPhone version of the digital reading platform for a while, but Berggren and his cofounder, David Kjelkerud, soon realized they would have to get a move on.

Today, they released that app, about a year and a half after the iPad version came out of beta at the end of 2011. It comes with all the features available in the iPad edition – distraction-free reading, beautiful design, highlighting, note-sharing – and it syncs seamlessly with its larger cousin.

The iPhone version’s early arrival is a development that has surprised Readmill. “To be honest, in the beginning we were more focused on tablets,” says Berggren. “We really thought that tablets was going to be the main thing.”

Indeed, the digital reading landscape has been shifting rapidly in recent months. A December report from iSuppli showed that shipments of ebook readers – like the Kindle and the Nook – would fall by 36 percent in the course of a year, and that shipments are expected to drop another 27 percent in 2013. As people shift their reading habits to smart devices, it appears that e-ink is ultimately going to be only a bit-player in the books market. But an equally important shift that is not yet well documented is that people will increasingly be reading books on their phones as much as, if not more than, they do on tablets.

For now, we have mostly anecdotal evidence. For instance, Berggren says that since Readmill started beta-testing its iPhone app, his cofounder, Kjelkerud, now uses his phone as his primary reading device. He’s also heard from friends with kids that they never get the time to sit down and read, but they can juggle reading with rearing by having an iPhone in hand and a kid on the shoulder. Reading on a smartphone is also better than the iPad for those times you’re waiting for a bus, or sitting on the subway, or at the dentist waiting to be called up, Berggren says. And, considering how little downtime many of us get in a day, those minutes add up to something significant.

David Jacobs, cofounder and CEO of New York’s 29th Street Publishing, echoes those sentiments. The app-magazine publisher says the iPhone and iPod Touch together account for 60-65 percent of all its app “opens.” Even though Jacobs prefers to read on the iPad, he uses the iPhone whenever he’s on the move or waiting in line or has only a few minutes to kill. “I think smartphone usage will keep growing, while iPad time will cut into the time people spend on laptops and desktops,” he says. “Like cameras, the best reading device is the one you have with you.”

Hugh McGuire, the founder of ebook-publishing platform PressBooks, calls smartphones the “dark horse of ebook reading.”

“They are with us all the time, and are actually well-designed for long-form reading,” McGuire says. He thinks the convenience factor and the rise of apps and mobile sites designed specifically for great reading experiences will mean smartphones will become the dominant way we read books in the future.

Other startups are betting that smartphones will be the future of reading, too. They include the New York-based Oyster, a still relatively stealthy startup that has $3 million of backing from Founders Fund, SV Angel, Founder Collective, and others. Readmill’s fellow Berliners at Dotdotodot are also playing in the space, but they want their app to be a repository and reading experience for not just books, but all kinds of longform content.

The problem that both Dotdotdot and Readmill face, however, is that they are so far only working with independent publishers and ebook retailers. Neither of them have agreements with Amazon, nor are they ever likely to. So even though they provide richer, and arguably better, reading experiences than Jeff Bezos’ literary gorilla, they are likely to be consigned to the margins. Oyster, on the other hand, is apparently engaging in discussions with major publishers, but the company has so far revealed little about its operations or specific plans.

So while the practice of reading is breaking out of its traditional confines – first bounded pages, then Kindles and Nooks, and now even away from tablets – its economics will, at least for now, continue to very much be dominated by the Internet-era’s traditional overlords. Sadly, even the snazziest iPhone app in the world isn’t going to change that.