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I think the key is what type of book you're talking about. If it's an informative book, I'd prefer the iPad. If you're looking to read novels on some type of device--that deep, immersive reading with minimal distractions--and paper isn't a desirable option--Kindle or something with e-ink seems like the best choice. One thing paper can't match, of course, is the ability to download practically any novel you care to read instantly--and be able to search, save your place, make notes, etc.
I just saw a bunch of stuff about Google Editions, and I'm pretty stoked about that. Ebooks seem like a cheesy alternative for authors who can't get published "for real" right now, but that could very well change in the near future. I particularly like the idea of getting a free ebook when you buy a printed book. That seems a great way to go for now; get people accustomed to ebooks that way and gradually wean them off paper.
We have to separate ourselves from the masses in some cases, though. As I've stated, I believe in the sad mass market edict of, "it doesn't have to be the best, it just has to be good enough". While eInk provides the best electronic reading experience, are traditional displays as utilized by tablets good enough? The answer is probably "yes". With that said, what is more likely to get into more users hands? Tablets. We're not a nation of readers, sadly, so the sexier, more functional device will likely take hold of the market, particularly since Amazon Kindle's - even with "free" 3G - sell for $259 and ONLY do black and white, which means you can't read color books like Vintage Games the way they were meant to be read, you can't read comic books, and you can't read PDF's (again, as they were meant to be read).
Now, if you look at the Kindle as the paperback of eReaders, then it should logically be $99 and no more. This way you get it in the hands of the most people and it doesn't matter if its black and white and optimized for just reading text. Now, when the color eInk version hits - hopefully no later than late next year - that could release at the current $259 price, though that to would be best served by dropping in price sooner rather than later. So you'd have the black and white Kindle at $99 and the color Kindle at $199, give or take. That would likely be a more effective strategy. What these eReaders have going against them are the same services are or will be available on the coming tidal wave of tablet devices, some roughly the same price as the iPad, some far cheaper. It's quite possible that the sales that four years worth of eReaders have enjoyed will be surpassed by the tablet category in just a single year. That to me tells me what wins, ultimately. (and again, by "win" I just mean, which becomes the de facto device - eReaders will continue to stick around in their niche indefinitely)
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