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All Amazon really needs to do is firmware upgrades and add formats (really just ePub) to their store. As pointed out on Teleread, the Sony is starting out with the wireless connection only being allowed to access Sony's store. This takes away from a lot of the functionality that the Kindle has, especially being able to connect to sites like MobileRead and Feedbooks to download free books. Of course, Sony does have all those free Google Books ePub files. So who knows. I also like to use the Kindle to go on mobile news sites, though (especially NYT and WSJ).
I think a simple firmware upgrade to support ePub would probably suffice. Don't forget, you get a wireless connection from Amazon for $100 less than Sony. I like physical keyboards, too. As far as the new Sony is concerned, I'm most interested in the free newspaper subscriptions. Teleread reported, "It will have magazines and newspapers as will as books and there will be no monthly fees or transaction charges."
Mostly, though, Amazon just needs to get access to library books. ePub support and some kind of deal with Adobe will be the most important part of that.
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