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I think there is a problem with "continuing to innovate" in terms of eReaders and that is do the buyers really want anything else that they are going to be willing to pay higher prices to get it? I guess higher resolution or color, but it is hard for me to get all that excited about either one. It's not like the current screens look terrible in comparison to a printed page.
Better battery life? Better than a month between charges? Whatever.
There could be some software improvements - better organization capabilities, better touch screen performance etc.
My gut says that "what's next" is going to be continued fighting over content and pricing and the cost of the standard devices is going to continue to fall.
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