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For me, Size and readability is everything. . .
I personally don't think the PRS350 is over priced. It sounds like, for roughtly $180, you get a rugged, SMALL, and very legible eReader.
And from that perspective, it would seem that the 350 beats the K3, hands down. I think for a comparison to be valid, you need to add the last generation ereaders (now selling for around $100) to the mix. Doing that, and the 350 looks reasonably priced compared to the opposition.
That way, you get your choice, lots of features versus an elegant and very usable design versus low cost with lower legibility.
Personally, I think the 350 will do very well with people who have been trying to read on a smart phone or PDA (And there's a lot of them out there, still). Many if not most of them will value a small size with enhanced legibility over everything else. It looks to me as if Sony did their homework on this device.
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