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Way back when someone said that the Japan model would be a iMX507 processor, I checked out the Freescale site on the processors. If I'm remembering correctly, the iMX507 doesn't have an e-Ink driver on board, but the iMX508 does. This struck me as weird, because if the driver isn't on board, it has to be supplied by another chip somewhere, and it seems to make sense that the driver on the processor would be cheaper.
As to the internal SD card, I'd guess that there is a world wide shortage of packaged flash memory, and Kobo went with the sd card because they could get supply. Also, they can increase the speed of the sd card easier than increasing the speed of the packaged chip.
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