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The determining factor at present is the high cost of eInk screens. A 6" eInk screen costs about £100 ($200) to manufacture (that's the cost to the device manufacturer, not the retail price), so you can't realisticially sell an eInk bookreader for under about £150 ($300) retail, plus whatever local taxes apply.
Manufacturing costs will certainly fall with time, but that's the current situation.
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