Love my Sony eReader...
Well, I've seen the Kendle, and I think that's at least half of Amazon's problem. The unit is too large, heavy, and complicated to be a convenient "reader", but it doesn't do enough to be a small PC. It's stuck somewhere in-between a "book reader" and "PC", and does neither job adequately.
I've owned a Sony eReader for several years now, and LOVE it. Before getting it. I said I'd *never* get one of these because I simply like the look and feel of paper too much. However, my wife (a lit major, can you believe) purchased one, and I started "borrowing" it to take on business trips. It was heaven on airplanes because it's so small and light, and the screen is extremely nice and easy to read. I've had no problem getting "lost" in the material I'm reading - forgetting entirely that it's an electronic screen. The books are typically half the regular bookstore prices (although I wish the price was lower still). Plus, I tend to read longer works, which would be a very large heavy book (hard to carry, hold up to read, etc). On the eReader, I can have literally *hundreds* of books - even huge ones - all in a small light form factor. I can be reading several different books depending on my mood, and can have them all at my fingertips.
It even has a very nice leather cover - making it feel like a real book to your hands, and pleasant to carry around. Plus the battery seems to last forever (although it does seem to drain itself regardless of whether it's on or off, so it does need to be periodically charged - but certainly not daily like a cell phone)
As with all things, it isn't perfect, but it's pretty darn nice. And, keep in mind that even a paper-based book isn't perfect. (If it falls to the floor, you loose your place, they can be bulky and heavy, etc.) So, nothing is perfect.
So - as a former hater of even the *idea* of an "electronic reader", I can now say that there is one out there that's solid competition to old fashioned books. I don't think there's a real risk they will ever replace paper books, but for at least half of my reading, I now prefer the eReader.
The key question: how long will it take for enough people to shell out the $$$ for one of these to really spark the market. In my mind, the Kindle did more harm than good, and likely poisoned the thinking of a bit part of the potential market who are now likely turned off the idea.
Dave L.