Japan's Sharp Corp said on Tuesday it would enter the electronic reader and book markets, hoping to grab a slice of the hot but increasingly crowded sector popularized by Apple Inc and Amazon.com.

Sharp plans to offer an e-book distribution service and launch compatible reader devices this year that will also allow users to watch video and listen to audio content.

It said it had the backing of various publishers in Japan and overseas.

The instant popularity of Apple's iPad has spurred growth in the e-reader and e-book markets, and global competition is heating up by the day with Amazon, Barnes & Noble Inc and Sony Corp slashing device prices in the past month in response to the threat from the iPad.

In Japan, companies like Sony and mobile phone operator KDDI Corp are teaming up to distribute e-books, seeking to break down resistance from publishers to digital content.

Google Inc also said this month it plans to launch an e-book service in Japan early next year.

Shares in Sharp gained 1.5 percent to 958 yen, outperforming a 1.2 percent fall in the benchmark Nikkei average.

(Reporting by Sachi Izumi; Editing by Edwina Gibbs)

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