Sony Corp unveiled its first wireless electronic reader, challenging Amazon.com Inc's momentum in the growing digital book market.

At $399, Sony's Daily Edition is $100 more expensive than Amazon's basic Kindle but it has a 7-inch touch screen and an aluminum body. It will go on sale in December with AT&T providing its 3G wireless Internet service.

After a year of headlines dominated by Amazon's Kindle reader, Sony has taken the offensive, with the wireless model joining previously announced lower-priced units.

It is unclear which consumers prefer. Amazon does not provide sales figures. In January, Sony disclosed that it had sold 400,000 readers.

Sony previously introduced the Pocket Edition for $199 and the Touch Edition for $299.

Ross Rubin, a consumer technology analyst with NPD Group, said Sony's selection of readers at tiered prices was a positive: Sony is offering consumers the choice, he said.

Still, the Kindle has generated the lion's share of buzz in the e-reader market, even though its 2007 introduction came a year later than Sony's first reader.

Sony and Amazon, the two largest players, are vying to establish a toehold in a market that they believe will become a profit driver as more consumers enjoy books, magazines, newspapers and other media on the book-sized tablets.

While some users have raved about convenience of digital readers, especially while traveling, analysts say the devices will remain a cachet item until prices come down.

Amazon's Kindle costs $299 for the basic version and $489 for a large screen version geared toward newspaper reading. The Kindle, though wireless, does not offer a touch screen like the Daily Edition.

The Kindle has captured a lot of attention because of the integrated wireless connectivity. So adding the wireless certainly fills a significant feature gap, said analyst Rubin. It is something that consumers in our research have expressed a lot of interest in.

Users of prior Sony readers have had to plug their device into a computer when it comes time to download content, which some have found inconvenient.

The wireless debut comes only weeks after Sony said it would convert its digital book store of over 1 million titles to EPUB, a publishing standard allowing users to read content on multiple devices.

That move should attract consumers who do not want to be limited by Amazon's proprietary system. Its titles can be viewed only on a Kindle or by using Amazon software on an Apple Inc iPhone or iPod Touch.

Sony's strength has traditionally been with open formats and broadly-available content, whether in televisions, DVDs or CDs, Rubin said, calling the company's EPUB format a recent extension of that.

What Sony is doing is really leveraging a number of its strengths, like industrial design and retail distribution, he said. It's trying to create that independence of content and device in the e-book category.

And as the market eventually broadens for e-readers, the demand will likely increase for an open format, he added.

Steve Haber, president of Sony's Digital Reading Business Division, said the e-book market was already developing rapidly. Momentum is building tremendously. It's just a matter of time -- five years, ten years.

Sony said a new application, Library Finder, would make e-books found at libraries available to its customers. Some 8,000 retail locations will carry Sony's readers in December.

(Reporting by Alexandria Sage and Franklin Paul. Editing by Robert MacMillan, Bernard Orr, Tim Dobbyn)

AT&T Sony Kindle