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I don't think that if price gets to 500$ (or more) people looking for a 13" e-reader would switch to 10.1" tablet it's a completely different product (size wise and for lcd).
As new to this world I really find hard (given that tech already exists and prototyped) to understand why manufacturers don't expand the lineup with several screen sizes. Having a broader product range is a widespread market trend. You have the cheaper model wich sells lots and you go up to the more expensive model where you sell less at an higher price.
After all if asus is putting out eee slate 12" at over $1200 along with other more "usual" size I don't think they plan to sell them as much as the "smaller" ones.
Also completing the line TODAY with such a product on the market (not just vaporware) would be a big advertising for the manufacturer wich would be the first to include big size e-reader in it's lineup.
I find really hard to understand marketing choices in this field.
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