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Yes it slows it down. I mostly notice it when calibre is updating metadata and whatnot on the ereader. Also after a book is added and the ereader updates its database.
My impression is that the 32gb is useful for those who read comics on them. The Oasis also lets you listen to audio books; could be helpful in that case as well.
The difference in size between kindle ebooks and epub ebooks is significant because epubs are compressed with zip while kindle ebooks are not. So it might be more helpful with kindle ebooks.
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