[fjtorres]

I'm not sure how long ad-supported readers will last
Last century's ad-supported PCs didn't last more than a year or two.
And Amazon not only sells ad-free Kindles across the board, they also allow consumers to change their minds and convert to ad-free. So the whole category might be a short-lived marketshare grab before current-tech reader sales plateau. (Which is coming.)

The whole point of Kobo doing this now is, first and foremost, to be able to advertise the magic $99 price point without having to bite the bullet and lower the MSRP across the board the way B&N did. It allows them to match the current entry-level US pricing without annoying buyers elsewhere by making it a "different" product which needs local partners and thus can't be shipped outside the US.

If it turns out that Amazon's claims are true and the ad-supported readers do outsell the ad-free models, well, that would give them a leg up on B&N even if the ads only bring in a trickle of revenue. Wouldn't surprise me if the KoSO were a preemptive strike at B&Ns international ambitions.

Unless all these gadgets are a lot cheaper to build than the iSuppli's of the word are telling us, the battle for the US market is now officially an endurance contest for second place and the title of "Top Epub reader", to serve as a springboard into the undeveloped markets of europe.

Anyway, whether ad-supported readers endure or not, there will always be ad-free choices.
They'll just be pricier.