The iPod nano is pushing prices down for competing digital media devices in Taiwan, just as mania for the nano appears to be building on the island. Taiwanese newspaper DigiTimes reported Friday that iRiver, BenQ, and Mirco-Star International have all reduced prices on flash memory devices in order to more closely compete with the iPod nano.

iRiver dropped the price of its U10 1GB MP3/MP4 player with a color screen from US$346 to $310; BenQ reduced the price of its 512MB from $90 to $81; and Micro-Star International has dropped pricing on a 512MB player from $121 to $84, and a 1GB unit from $151 to $117.

Apple's iPod nano is priced at $207 for a 2GB model in Taiwan, and $258 for a 4GB model.

Apple has long been known as a higher-priced vendor of computers with its Macintosh product line, but the company has often been the price leader with the iPod family. This has been particularly true of the iPod shuffle and iPod nano, the company's two flash memory-based devices.

For instance, the company's 512MB iPod shuffle is priced at $108 in Taiwan, and a 1GB unit can be had for $136, both very aggressive prices when comapred to the above-mentioned locally produced players.

The iPod nano has pushed the company's price advantage even further, however, in part because the device uses a new form of flash memory from Samsung, with a favorable pricing deal with the Korean company that locks of 40% of Samsung's supply at a steeply discounted price.

This has allowed Apple a pricing advantage that has already angered Korean companies, and is clearly rippling the waters in Taiwan, as well.