There's not enough detail in the proposal.
1. Do the units have to be working to be traded in?
2. How many generations back can be traded up? eg I have a Sony PRS-300 - can I trade that in for a T3?
3. Where is the credit coming from - do you have to buy the new unit from a specific store? (And will it have a convenient $50 mark-up?)
4. Who pays postage?
5. Will you need to "unlock" the readers if the previous owners don't bother to de-register their devices with the relevant DRM group.
And finally a comment - given the current prices of new units, $50 is a lot. In some cases, more than 50% off list price.
Since we are talking about impoverished African communities, are ebooks really the way to go? These will be older and probably well-used models (since the people likely to trade up will be regular readers) so battery life will be shorter (consider the availability and reliability of electricity supply), and software/hardware failures more likely. What do you see as the advantages of ebooks over pbooks in this situation?
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