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As ereader prices go down, interest in ad-supported readers might also diminish, because of decreased price-sensitivity. An ereader is not like a magazine, where you keep it for only a short amount of time and then buy a new one.
I wonder how B&N is going to keep up, though. Will they also introduce a cheap, low-end model to compete with the Kindle Non-Touch? Are they taking a loss on the $99 Nook STR?
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