To a great extent I think that Sony is a lot like AT&T and IBM during their monopoly days. The decision makers are too far removed from the consumers and really don't get why something becomes popular and why something does not.
The biggest issue that I have with the eReader is the lack of flexibility in the software. Why limit yourself if you don't have to. Yes, I know that there are some here who say, "I don't understand why you are complaining, it works exactly the way I work". My answer is, that's nice, but not everyone works the same way and it's a whole lot better to make more people happy with a little extra foresight and effort than make just a few happy.
I understand that the design of the eReader is that the customer has a hand full of books on the reader at any one time and the media card is so you can also play music or pictures. But, a goodly percentage of the people who are buying this device want to have a lot more books available on the device than that. Why not be flexible up front and allow people to use the eReader in different ways? Me, I like to have all my books available to me at one time. I like to have all my music available, also. That's why I have the largest video iPod that they make. What's better is that Apple makes it easy for me to access any song that I may want, I quickly search by author, title, album, genre or I can create static or dynamic playlists. People who just want to play random songs can do that without fiddling with all the playlists. All in all, very very flexible.
I can't think of a technical reason for not supporting collections on card, or for not including better organization of books. It isn't hard and the little touches, make the difference between a good device that doesn't sale well and a block buster device.
I understand why Sony decided to go in the proprietary direction that they did. They already had the connect store, so someone decided that they had to leverage that. Besides, I'm sure the marketeers sold it as a why to bring in billions and billions of dollars by locking people into Sony. Personally, I think they would have been better off by partnering with mobipocket and certainly, looking at it now, they would have been far better off if they had. One would have thought that Sony had learned their lesson about proprietary devices by now, but apparently not.
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