This is probably bad news. I contacted Newsstand customer support some weeks ago, asking whether they planned on distributing their content via Ereaders like the Iliad.

I want a NY Times or Washington Post-subsidised Iliad reader (mostly for the newspaper content, believe it or not), and the NY Times seems to have tied itself to Newsstand as its electronic-content distributor...

My message:

curious if newsstand.com or its partner newspapers will be offering
the Iliad Ebook reader at any point soon. I've used newsstand service
on a laptop before (and didn't find it comparable to reading the
newspaper in print form). But I was thinking of giving it another go
when an e-ink based reader becomes available.

The reply was as follows:

Thank you for contacting NewsStand's Customer Support. Although the NewsStand product is continually updating, we do not use and do not have plans to use e-ink.

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If they are an exclusive distributor for Harper-Collins, and have no plans to use E-Ink...well, you do the math.