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I don't think the SmartQ 7 is a better reading device than the PRS-505, but the comparison is much closer than it would have been with a general purpose device even a year ago. The SmartQ may already be "good enough", and the FictionWise eReader software for Linux may put it over the top. If FictionWise is smart, they will release ARM binaries when this comes out this summer.
Eink is standing still, or putting all its efforts into adding color, and other EPD alternatives still don't seem ready for prime time. Meanwhile LCD technology is getting better, and in particular cheaper and less power hungry. Batteries are also getting more capable. In a year, devices like the SmartQ will be cheaper with a longer battery life. What will happen to EInk devices in a year? They seem to be getting more expensive, e.g. adding wireless and a touch screen (both of which the SmartQ already has). The reason for a dedicated single-purpose device is lower cost and/or greater capability. The Sony's still win, but they are not pulling away.
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