As several providers rush into the e-book reader market, a Canadian company is preparing to take advantage of a huge population of stealth e-book readers -- smartphones -- and launch its Shortcovers service, which lets consumers read books on their handsets.

The digital book platform has been tested for Apple's iPhone, according to people who have seen the service. Shortcovers is a division of Indigo Books & Music, which operates a Canadian nationwide chain of bookstores.

The application is expected to be offered on Apple's iTunes online App Store, but the application also is said to be aimed at RIM's BlackBerry devices, Microsoft Mobile handsets, and the Android smartphone.

Shortcovers said its service is able to use standard formats, including Microsoft Word, plain text, HTML, ePub, and FTF, although the service operates with proprietary formats, too. It appears to be planning to offer a wide variety of printed matter on smartphones, not just books. A company blurb states: "Discover thousands of books, chapters, news and magazine articles, short stories, blog posts, and more, anywhere, anytime online and on your mobile device."

During recent demonstrations of the service, Shortcovers executives said they plan to offer chapters of best-selling books for 99 cents a chapter. Launch will be this month, according to a message on the company's Web site.

The potential use of smartphones as e-readers has grown in recent months as handset displays have improved in resolution and clarity and become larger. At the same time, manufacturers have been piling into the market offering new, improved e-book readers.

In addition to a new model of Amazon.com's popular Kindle, Sony has a new text reader, and startup Plastic Logic is slated to unveil a reader with a 10.7-inch diagonal display Tuesday.

According to media reports Plastic Logic has signed up several publications to present content on its reader. Also in recent days, Google unveiled a service that enables some smartphone users to view 1.5 million titles in its Google Book Search offerings on their handsets.