I have no problem reading for long periods of time on my smart phone (Xperia X10). I love the fact that it is backlit (great for reading in bed), that I can have multiple e-readers on it (fbreader, Nook, Kindle, Kobo, etc.), and that I can pull it out of my pocket anytime, even just for a couple of minutes standing in line. Even though I also have the small Sony PRS-300, which I really like too, it doesn't really fit in a pocket, although it fits great in my backpack. Yeah, yeah, I know it's lame to whine about the effort to open my backpack, but that's just the way it is.
For me, the PRS-300 is now pretty much reserved for reading in the sun (one of my favorite restaurants has a great outdoor patio) and for trips or other occasions when I need to conserve the battery life on my phone.
For me, the smartphone IS my primary e-reader now.
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