ePub and Mobi are clawing it out for "industry standard," and ePub is slowly winning because it's open source. EPub is the dominant format in Europe, and if Amazon keeps on its current path, it'll eventually be the dominant form here, because all non-Amazon devices will include it instead of Mobi, which has exclusivity requirements on its DRM.
The way to deal with different readers is to use a reflowable format that fits whatever screen it's put on, preferably with enough default settings to look okay for most people, and enough customizability for those who care to tweak the standard settings to get the view they want. EPub and Mobi both have that. (HTML has that, but is utterly lacking in anything resembling copy protections.)
What they don't have, is easy ability to print. Which is an advantage for some publishers, but a drawback for others.
PDF isn't user-end customizable (for the most part), and that means it either looks right for the reader--or it's useless. PDFs on a computer are somewhat adaptable; the viewing window can change sizes, and the document can switch between screen width, full page, or zoom in to whatever level the reader wants. But most mobile devices don't have nearly the flexibility of Acrobat Reader, nor even the same flexibility as Foxit or Sumatra. (If nothing else, there's no "resize the viewing area" option on a mobile device. You have the whole screen, not a window within that.)
Most ebook buyers aren't aware what the customizeable options are... all they notice is whether or not they enjoyed reading the ebook. If they did, they might buy another; if they didn't, they might decide "ebooks aren't for me," without ever noticing that the problem might be with the software or formatting, not the fact of reading on a screen. (Which is why we're prone to being a bit fanatic about ebook formats and so on. We'd like more people to read ebooks, and if they don't enjoy the very first one they download, there's a good chance they'll give up on the whole concept.)
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