My iPhone works very well for me as a supplement to a larger screen e-ink device. I'm not so bothered by the small screen, but I once was between e-ink devices and tried using my iPod Touch as my sole reader, and it was annoying it ran out of battery charge so quickly.
I couldn't imagine having only my iPhone to read on, but it's really great for taking with me when I'm out - not to speak of it being the ultimate mobile personal computer.
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