It appears that Apple has been deciding to partner Amazon in order best Google's Play strategy. I say this as Amazon Prime Videos is now available to be consumed on iPad officially. Also both these developments have taken place after Google launched the Nexus 7. Maybe the talks have been going on for a long time, but I would say this definitely pushed them into making a decision.
It's clear that Amazon is reacting to the Nexus 7. Once Kindle Fire sales slowed down, making more of their content available on iOS (note that Cloud Player has also recently launched on iOS) is an obvious way to make their ecosystem more attractive than Google's.
That being said, I doubt Amazon and Apple are working together. There still aren't any buy buttons in any of Amazon's apps (Kindle, Cloud Player or Instant Video). I'd expect Amazon to insist on some flexibility there as a condition of any partnership.
More importantly, there are also serious antitrust implications to Amazon and Apple working together against Google: They're established players in digital music, digital video and ebooks and, especially combined, are dominant in all three. Ganging up on Google (which is a relatively new entrant in all three) would be a sure-fire way to attract the attention of the DoJ. There isn't even an argument that the DoJ wouldn't find out or wouldn't be able to gather evidence. They're already pursuing a case against Apple for facilitating agency pricing. Any new arrangement Apple makes with Amazon would inevitably come out as part of that. I'd be shocked if either company's general counsel were stupid enough to let talks even exist, let alone go anywhere.
