As an owner of both a nook and an iPad, I vastly prefer my nook for reading novels. On the other hand, my iPad is what I use to read magazines and comics.
The screen only accounts for the comics and magazines because it's in color, has a faster response time (I tend to zoom and scroll on comics and magazines), and the 9 inch screen is better suited for some formats while the 6 inch screen is better suited for others.
The great thing about electronic formats is that they can be formatted to work with multiple screen sizes as well as used across devices, so it may not be a matter of whether ebook readers or tablets win, but how many people choose to use more than one device for reading.
E-ink is getting cheaper and eBook readers may become a sub-$50 item that people buy to read novels or to carry around with them on a daily basis. They have the potential to be more durable, lighter weight, and less of an issue to have lost or stolen than a tablet (with all your personal information on it). This potential drop in price could also lead to eBook readers becoming a commodity that reaches a market outside the current tablet and ebook reader market. If I could buy a fairly decent ebook reader for $25, I'd give them as gifts very easily, I'd carry it places where I'd otherwise be afraid of losing my nook, and they may even be given as standard equipment to all students.
I personally benefit from the lack of distraction my nook has to offer. When I read on the iPad, it's too easy to move to a web browser, game, email, or whatever else I have set up. Setting the iPad aside to pick up a dedicated device helps me focus on reading. Of course this isn't the case for everyone, but most people I know who have tablets also own another (usually e-ink) ebook reader.
Paper books now have several different sizes based on use, presentation of information or text, and personal preference. Why shouldn't the tablet and eBook reader market have that same diversity? Afterall, assuming you have a standard format (and standard DRM if we must have it at all), there's no reason why you can't read on your favorite device... or jump between multiple devices.
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