Now this is great news and will finally make the Kindle device the world beater it's truly capable becoming.
The Good eReader website broke this news - "We have some rather breaking news with online giant Amazon and their highly successful line of Kindle e-readers. It seems many publishers have been told by the company that in the near-future, they should be submitting their books to Amazon in EPUB format and not exclusively MOBI. They also went on to let us know that Amazon was indeed planning something BIG and that soon the Kindle ereader will have the full capability to read ePub books. This news has been confirmed by at least 4 publishing companies we have spoken with during the last few day."
The Amazon Kindle, for the last six years and more, has exclusively sold books on its Amazon Bookstore in the Mobi format. They also devised applications for major platforms such as Android, iOS, PC, Blackberry, and Windows Phone 7 for reading their books. This insured that if you had purchased a Amazon Kindle e-reader or ebooks from their store, you were locked into the Amazon ecosystem.
Four publishers in the last week have confirmed that Amazon has indeed told them they now have an option to submit eBooks to be listed in the Amazon store in ePub format.
It would make sense that Amazon will continue to distribute books still in MOBI format since they developed the technology and so much of its online infrastructure is based around it. MOBI/AZW is known to have similarities with the ePub data structure and has most of the code embedded into its format. The ePub format is more or less the industry standard for ebook formats and almost every other online ebook store aside from Amazon sells their books in that format. With Amazon embracing ePub technology it further substantiates that ePub is by far the most popular format to read ebooks.