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Price will of course have to drop--but that had to happen without tablets etc. There's only so many people who both read enough, and are willing to try reading on a gadget, to pay $200-300+ for a dedicated reader.
I don't think format etc. matters that much. Most people in the mainstream aren't going to bother with that stuff--unlike the informed users here. Most will just buy a Kindle or Nook etc. and only get books from the attached story anyway. They'll never come to a site like this and learn about the other options etc.
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