MP3 vendors fear the iPod nano - price cuts

DigiTimes says the launch of the Apple iPod nano forced MP3 player vendors (especially Chinese) to reduce their retail prices by 10 to 20 percent for 512MB models and 25 to 35 percent for 1GB models in the Taiwan market.

The vendors claim they slashed prices to avoid potential stagnant sales or excess inventory due to the launch of Apple's new flah-based digital audio player.

Although Apple has not yet announced when and at what retail prices the iPod nano will be launched in the Asia market, in the US, the 2GB iPod nano is retailing at US$199 and the 4GB model is priced at US$249. The source points out that these prices indicate that the iPod nano will have a large competitive impact on the Taiwan market, putting heavy pressure on non-brand name 512MB and 1GB MP3 players.