You can download audiobooks via iTunes on your phone by going to your iTunes app and doing a search for the book you want.
If you want to read a book on your phone, you can go to your iBooks app, click on Store within the app, and then you can browse for the book you want. When you find it, it will give you guided instructions on how to purchase and download your book.
You can also read books on your iphone through the Kindle and Nook apps. However, you have to purchase the books on your computer. It does not allow you to purchase books within these apps.
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