Marco Arment had an excellent take on this in this episode of his Build & Analyze podcast: http://5by5.tv/buildanalyze/22

The gist of it is that, like with RSS functionality in Safari, Apple moving in tends to raise awareness of the functionality but not go so far as to satisfy a lot of users. So Marci ultimately sees it as a benefit: more people knowing that they could use a reading list means more Instapaper customers.

I wouldn't see this as a danger to Instapaper, I rarely ever use Safari (especially on an iPhone) to send to Instapaper. It feels more like a Readability competitor, who even use the phrase "Reading List" on their site.

It would be interesting to know the Instapaper and ReadItLater's user break down by OS. I think the percentage of Windows and Linux users who who use Safari and one of those services is small enough to discount. So for the sake of discussion, let's assume the number of Mac users equals the number of Safari users, and that the services' customer breakdown by OS is roughly equal to the global distribution. If all of Mac users then quit using these services, about 10% of the user base would be lost. This is obviously a high estimate, and if I were Instapaper/ReadItLater, I wouldn't be very concerned.

On the other hand, if the primary user base came from, say, iOS, this may be a more significant threat. Never having owned an iPhone or used an Instapaper app (I only use it in my browser. I like to blow up the font and strip it clean.), I cannot comment on their attraction over Safari mobile. Is the Instapaper app more than just a bookmark and viewing pane?

I was just wondering, actually, if Apple would make something to compete with Instapaper. The iPad is not necessarily an ideal ebook reader - it's heavier, more expensive, and harder to read in the sun than the Kindle or Nook.

Don't get me wrong; I love the iPad, and I've read a couple of books on it too. But what I really like doing is reading articles on Instapaper. The iPad seems ideal for reading and collecting Instapaper-length stories or essays. To me, it would make a lot of sense to integrate something like "Reading List" into iBooks, and market that as a feature. It may not replace Instapaper/ReadItLater for us, but I'm sure consumers who have never heard of either will love Apple's Reading List.

Tough when your company becomes a feature

I bet it will sync remotely with all your iOS devices, just like the bookmark in iBook.

This is a small feature but could be an indicator of very big things for Apple. If the iCloud rumors are true then there could be a huge opportunity for keeping your desktop and smartphone/tablet in sync, and this would be a big advantage for Apple and MS since they control desktop environments.

For example, say I have a Pages document open and go to leave the house, the same document could automatically be available on my iPad in the exact same state I left it in without me having to do anything.

Maybe the Instapaper guy will break down and support Droid now. At least something multi-platform will have an edge up on Apple.