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There will always be markets for both universal devices like laptop based tablets, and for dedicated items like the readers. Since the readers use some of the same hardware only lower powered, if tablet prices drop, so will reader prices. One will not prevent or stop production of the other, sure there will likely be a point where the line is blurred, where it is a reader with some limited app usage, or a basic tablet with limited app usage, but those will be the cross overs. The individual items will retain their markets and not really affect each other much.
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