Sony Corp said on Thursday it would launch an e-reader in Japan by year-end, taking on rival Apple Inc just a day before its iPad hits shelves in the country.

Sony said it also plans to launch an e-book content distribution service in Japan by year-end as it aims at a chunk of the promising electronic book market.

The debut of the iPad, a portable computing and entertainment system that also functions as an e-reader, is expected to boost Japan's still-small e-book market.

Research firm Fuji Chimera Research Institute estimates the content market will double to 87 billion yen ($967 million) in four years.

Sony said it will set up a planning company on July 1 for the content distribution service and will hold 25 percent of the firm. KDDI Corp, Toppan Printing Co, and the Asahi Shimbun newspaper will also hold 25 percent each.

The new service will offer comics, magazines, newspapers, as well as books online, Sony said.

Sony sells its e-reader Reader in the United States to vie with Amazon.com's Kindle, Barnes & Noble's Nook, and Apple's iPad, but it does not currently sell the device at home.

Sony attempted to create an e-reader market in the past when it launched reading devices only to pull them from shelves after a few lackluster years due to a lack of content.

Before the announcement, Sony shares ended up 2.1 percent at 2,788 yen, outperforming a 1.2 percent rise in the benchmark Nikkei average.

(Reporting by Kiyoshi Takenaka, Writing by Sachi Izumi; Editing by Joseph Radford)

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