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Actually I use my WM phone with a 3.6" screen quite often to stream TV when I am in a place with free WiFi and don't have my reader with me. That is, for me, less of a problem than reading a book on the same device or on my iphone! And soon phones will have those built-in projectors, then it will be even better.
And extended reading of Chinese characters on a small screen? I can't see that becoming popular. My guess is initial delivery of the content to the phones and then when people realize what a pain it is then CHT will have a real reader to sell them.
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