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The dedicated e-reader isn't dead, but I suspect it's going to remain dormant until the next major upgrade in e-paper technology, which may wind up killing it.
It basically depends on whether we ever get e-paper screens that can duplicate all the functions of an LED screen without drawbacks, because if we do, phones and tablets will have everything the e-reader has and will replace it completely. If they get better but can't actually play videos or most games, then plain paper devices will still have a niche just for themselves.
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