I'm enjoying the meandering thread!
It really doesn't make financial sense to get into ebooks. They often cost more than the paperback version and can't be resold after you've read them. Ebooks also almost never go on sale, and they can be remotely deleted from your device at the publisher's whim. Then add in the $80-$250 cost for the device itself, and consumers lose interest. And most readers only read one book or magazine at a time, so being able to carry a library with you is seen as a gimmick. Also, a typical paperback fits in a pocket better than most ereaders.
Will color epaper change the current reality? I hate to say it, but color epaper might kill what's left of the dedicated ereader industry. Consumers will expect a color ereader to have most of the functions a tablet has, ensuring they're all running Android/Fire OS. The initial price for color epaper is expected to be on the high side, meaning those tablets will be in the premium price range. Epaper screens are inferior to modern LCD and OLED screens when comparing contrast, color accuracy, and refresh. Their advantages in power-usage and sunlight would need to be successfully exploited and promoted to sell enough of the product.
Without those considerations, I think it will see most of its success in already expensive products like watches, vehicles, and signage.
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