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I have the pocketbook 360 which is also a 5 inch screen device and as my main ereading device, I wouldn't want a screen any smaller because I usually read for many hours at a time. I don't know what the exact dimensions are compared with your Sony but I can fit my pb into most of my coat pockets, pockets on my dressing gown and small bags so very, very portable and the hard cover means the screen is safe without adding much bulk.
Not sure if there would be a big enough market for a proper ereading device which is much smaller.
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