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A Kindle is not a a tablet, and a tablet is more than just an ereader device.
I do have an iPad2, a Kindle 3 and a Kindle DXG and to read novels or non fiction books, the Kindle 3 is way much better. You can read inside or outdoors, and is so light an portable that the reading experience is just a pleasure. You can even buy a book with just following couple of simple steps and in seconds, is just there for you.
Now, for reading PDFs I find the iPad/GoodReader an awesome experience and I think that's where Amazon it is currently failing. If they are able to provide a better PDF experience on the DXG, like Sony does, things could be a bit different.
iPad is also much more than an ereader so for casual readers or people who don't have eye strain problems, they can combine fun, browsing, magazines with same ereading experience than a Kindle. Not an Amazon fault, and here is where price and features push people to one side or another.
Marketing plays an important role when selling and buying products but I don't think people are stupid and they buy just because is X or Y brand. People are becoming more and more educated in the technical aspects of a device and they are starting to buy because it fills certain needs, not because it is popular or "in fashion".
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