A $149 e-reader device was announced Wednesday by Kobo of Toronto during the CTIA show, although the company's chief executive said he recognizes how crowded the e-reader device market has already become.

"When I came to CES in 2009, there were two e-reader companies, and when I returned to CES earlier this year, the number of e-reader companies had grown to 160," said Michael Serbinis, CEO of Kobo, in an interview. Kobo is an anagram of "book," he explained.

Clearly, not all of those e-readers will pass muster. Already, some makers of e-readers that use black-and-white e-ink are talking about adding color to their displays to keep up with color tablet computers that will support e-books, including the iPad.

At $149, the Kobo e-reader is one of the cheaper reader devices to come to market.

Serbinis said part of the reason Kobo will be able to compete in a crowded market is because of its low price and because the e-book market will grow faster than some forecasters have predicted. Amazon's Kindle 2, for example, sells for $259, which is $110 more than the Kobo.

While many forecasts show that e-books will take up only 3% of the total market for books in five years, Serbinis said he has talked to several major book publishers who think that number will be closer to 25% in five years.

"The demand for e-books has recently accelerated tremendously," he said.

Another reason Kobo expects to do well is because it just announced a standard e-reading application called "Powered by Kobo" that will be used in an array of e-readers to be launched this year. Kobo already has provided e-reading applications for the iPhone, BlackBerry, Palm Pre and Android smartphones and will have one for the upcoming iPad.

"Consumers want choice and the freedom to read on any device," Serbinis said.

The Kobo eReader will sell for $149 through Borders bookstores in the U.S. this summer and will come preloaded with 100 classic books. Barnes & Noble, a larger competitor to Borders, began offering its Nook device late in the fall and is planning to offer an application to support the iPad, as will Amazon.com's Kindle e-reader.

Unlike some e-readers that connect to a wide-area wireless network to download books, the Kobo device can connect to select smartphones through Bluetooth or will update via a USB cord connected to a desktop or laptop computer.

While its size is similar that of some other e-readers, it has an unusual D-pad navigation button for moving a cursor and making selections, similar to D-pads used on some cell phones. In addition, side buttons are provided for home, menu, back and display. It weighs 200 grams and is 184 by 120 by 10 mm in size (7.2 by 4.7 by .4 in.). It also has 1GB of memory that can hold about 1,000 books.

Matt Hamblen covers mobile and wireless, smartphones and other handhelds, and wireless networking for Computerworld. Follow Matt on Twitter at @matthamblen or subscribe to Matt's RSS feed. His e-mail address is mhamblen@computerworld.com.