Sony Corp said on Thursday it would launch an e-reader and online content distribution service in Japan by year-end, taking on rival Apple Inc whose iPad hits shelves in the country on Friday.

The maker of PlayStation games and Bravia flat TVs said it also plans to launch its e-book operations in China, Australia, Spain and Italy this year.

Sony's Reader electronics book reader, which vies with Amazon.com's Kindle and Barnes & Noble's Nook, is available in the United States, Canada, Britain, France, Germany, Austria, Switzerland and the Netherlands.

The debut of the iPad, a computing and entertainment system that also functions as an e-reader, is expected to boost Japan's still-small e-book market, which Chimera Research Institute expects to double to about $1 billion in four years.

Sony has partnered with telecoms operator KDDI Corp, printing firm Toppan Printing Co and the Asahi Shimbun newspaper to set up a planning company to prepare for the service, which will offer book, comic, magazine and newspaper content.

Asked about the time lag between iPad's Japan debut and the launch of the planned contents distribution service, Sony said the breadth of available content is more important than time to market.

An e-book business does not make much sense if it does not come with enough content in terms of both quantity and quality ... You have to build a system first to ensure that, Sony Electronics Senior Vice President Fujio Noguchi told a news conference. I don't think we are running behind.

Sony Electronics is Sony's U.S. electronics sales division.

Although the planning company will be owned a quarter each by Sony, KDDI, Toppan and Asahi, the content distribution business will be open for other firms to join, and there will be multiple types of e-reader terminals from different companies, Sony said.

Will the new operating company offer contents to iPad or Kindle? It is not for me to decide. But this is going to be an open system. I don't deny the possibility, Noguchi said.

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 and Sachi Izumi; Editing by Joseph Radford and Sharon Lindores)

($1=89.94 Yen)

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