In the tech industry, for a given product category, the more prominent vendors that everybody knows about and are seen as industry leaders are referred to as First Tier or Top tier. Second Tier vendors are smaller companies that are less recognizable to the average consumer but that still develop their own products. Third tier vendors generally just rebrand generic products from (these days) an asian developer, so often you see pretty much the same product with minor variation (color of the case, altered firmware) under different brands.
So, in the ebook reader business, we have Kindle, Nook, Kobo, and Sony in the top tier as they are generally recognizable names with distinct hardware designed by or for them by partners. You can find them at retail or multiple online retailers. You should expect a polished product at relatively low prices as they sell in very high volumes which results in lower build costs. They shouldn't *need* to cut corners to be competitive.
Second tier vendors like Pocketbook, Onyx, Bookeen are more visible to enthusiasts than the general public. Their brands aren't household names though in some regions they may have a significant share of the market. Often their products are aimed at very specific niches so that if you need their specific features you will be very happy. They do not have the resources for support that the bigger players do, so the warranties or customer support may or not be as comprehensive as the bigger players. In ebook readers, their prices will be higher than the top tier but the devices tend to be feature rich and customizable. Second tier vendors most usually target value buyers who may be willing to pay more for desirable features, but absent a rich feature set, will demand a lower price. It is a tough place to be as a vendor.
Third Tier vendors have been largely driven out of the US eink reader market. You find a lot of them in the android tablet space these days. Some third tier brands are actually recognizable (Craig, Coby, Emerson, etc) through their broad distribution in physical retail. The products, within the same brand, can range from great to substandard so you rarely know what the expect. The prices are always low and if you know what you are doing you can get great value from their "me-too" products.
The terminology is just a shorthand way to tag products you *should* be demanding of and those you need to temper expectations for. With a lot of modern consumer electronics you aren't just buying the hardware, you are also buying customer support for bug fixes, updates, and repairs. What level of these you can reasonably expect will depend on the brand and the company's resources.
Last edited by fjtorres; 02-08-2013 at 08:38 AM.