I don’t disagree with your prediction for Google paying more attention to e-readers but if it’s limited like existing e-reader setups then people will continue to root these devices.  Also you have to remember Android is an inherently graphical interface and animations have been made a significant part of the experience.

So we may see more of solutions like Marisol displays before the final merger between traditional LCD’s and e-ink eventually happens.

Similar to the Kindle, Amazon is also strongly positioning themselves to give their tablets a strong edge when they finally release them, providing for example a App Market, daily free app deals, and both music and video streaming services.

That is also why Eink is owned by an LCD company who has technologies in the works such as the one called FFS LCD.

But for now e-ink is doing 20 million sales a year and that number is still going up, up from nearly nothing 4 years ago. The Kindle amazingly became the top way for Amazon to sell books, even though before Amazon was the worlds top book shop.Millions of readers are very happy with e-ink today because it’s actually great for reading. Not every device absolutely needs to be able to run Angry Birds that is also why I expect Google to announce Android for e-ink pretty soon, basically it being some customized UI provided by Google in the open source to make it easiest for companies to use Android to finally make touch screen WiFi/3G e-ink e-reader really useful (for more than buying ebooks) for the first time.

We’re still a long way from this eventual merger but screen technology like Pixel Qi are starting to bridge the difference between e-ink and traditional LCD displays.  While e-inks are starting to adopt fast enough refresh rates to start employing animations, as well as starting to use color, and are becoming more LCD like themselves and thus starting to bridge the gap in the opposite direction.  So eventually all tablets will be able to function both as a tablet and as a ereader without the usual compromises they face now that keeps them as separate device categories for now.

While the lowering of device cost all across the spectrum also means the price advantage becomes less important over time and dedicated ereaders are likely to follow the trend that say pocket organizers did before.  Being once very popular but since supplanted by superior device offerings.

This year e-ink will sell 20 million units, it’s crazy many, no signs of slowing down just yet. Especially now that they managed to bring ARM Cortex-A8 type performance in the e-ink e-readers with i.MX508 while lowering power consumption, lowering the price to make $99 e-ink e-reader to be sold this year a probability, and most importantly building Android as foundation for all future e-ink e-readers, and this infrared touch screen is pretty good (although I would like them also to come with large and silent next/previous page buttons next to the screen also).

Just the idea that you can click on any article on your PC/Laptop to read further on much more eye friendly e-ink screen device, all synchronized with Chrome-to-phone functionality of Android, that will make these much more useful for professionals. Also the possibility to sync annotations on e-ink back to the cloud as well.

http://www.youtube.com/watch?v=k22BB8VPI5o

So I hold out more hope for a compromise device with either a Pixel Qi solution or something similar. 

While Amazon is also coming out with it’s own tablet solutions.  So we shall see how the ereader market develops next year and how quickly it will either merge with the tablet market or whether it will continue to exist as a separate device category with only some overlap. 

I’m betting on merger myself…

Though, it’s still to be seen if either or both of Kobo Touch and Nook Touch will want to let users do whatever they want with the Android software that they are based on, it’s to be seen if alternative ebook stores can be installed, if easy integration with Google Books, Google Reader, Chrome-To-Phone and Google Fast Flip can be integrated. The potential is really great, but the question is will Kobo and Nook be courageous enough to embrace the opportunity or will they try to enforce a more or less closed implementation of Android on e-ink to try to only work on their own book store.

Like the previous Nook, it’s always possible to root those things, but that experience is never as good as a product which manufacturer actively support openness and encourage innovation around their product. I think it’s got to be obvious for them that that is the way to go for them to compete in volume against the Kindle, but maybe they can’t see it like that and they feel forced to only go for using Android as a way to do their own closed system.

The full Android type ereaders, like the Color Nook, though will likely use traditional wireless pay for service given you can do a lot more and will likely use more bandwidth than just reading text.

It’s nice to see the ereaders improving though, and the longer run times are a plus.  Though the Kindle still has the better web browser and wider range of features for the same price as these two new readers.  So how the makers set up the platform is still important, though I wish Amazon put a card reader on the Kindle, the storage limit is quite constraining if you keep a large library.