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The thing is that Bezos reports that 50% of books sold are Kindle books for those books that have both Kindle and paper versions. This is illuminating to me, because I can't believe that anywhere near 50% of Amazon customers are Kindle owners. It implies that Kindle owners are heavy readers -- those who buy a lot of books. It makes sense, why would you pay several hundred dollars to use a device to read one or two books a year.
So, if your goal is to get reading devices in the hands of lots of people, you will probably need a cheaper version or more general purpose (pda/smartphone/tablet) version. For those who read one or two books a year, this will probably be sufficient.
For bibliophiles, something closer to the current dedicated devices will still be necessary. We spend a lot of time with our devices and will be less accommodating in terms of compromises. Of course, if PixelQi or someone else comes through, I would be quite happy if my reader can also be a PDA and an internet tablet. However, not at the cost of compromising the 1) readability, 2) battery life, and 3) portability of my current device.
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