I think that there *is* a market for such a device. It seems that many of you are looking at it in terms of reading novels or other plain text work. However I would pay $100 for an e-ink device that is good for reading academic papers, especially those with graphs and equations. The ones I read are all in pdf. I am still printing those out or reading them on my laptop since I haven't found my 10.1" tablet a good reading experience (due to aspect ratio). If you look through this forum you'll see plenty of people looking for something like this.
I can also see a need from companies who want to issue electronic document readers to staff, but don't want them to have the added functionality of tablets (games...). I recall a few queries along these lines in the past as well.
What I would look for in such a device:
1. Size and aspect ratio appropriate to display A4 and US Letter at 100%.
2. Good resolution - I can't suggest a figure but journal print can be quite small and it needs to be at least as clear as printing on paper.
3. Light weight
4. Long battery life
Possibly also:
5. SD card slot - for easy storage and transfer of documents.
6. Wi-fi - with basic browser to allow downloading of journal articles.
7. If you want a broader market, ensure foreign language (character) support. Most international journals are in English, but there are plenty of documents that won't be.
I do agree that you need a clear business plan and some evidence that you are capable of actually completing this project. People aren't going to give you money without some assurance that you can deliver.
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