Sony is reportedly evaluating a strategic-alliance with Taiwanese manufacturers for OEM production of portable DVD players, with leading makers in Taiwan showing interest, as DigiTimes.com reports.

Sony?s motivation is to capitalize on Taiwan?s globally strong manufacturing capability of TFT-LCD panels and optical disc drives, the sources pointed out. Interested manufacturers include BenQ, Lite-On IT, Quanta Storage, Mustek Systems, and CyberHome Entertainment (formerly named Protop Innotech), according to the sources.

As prices for 7-inch TFT-LCD panels may drop further and Taiwanese makers are expected to cut prices to compete for OEM orders, the OEM price for portable DVD players are likely to drop to around US$100 in 2006, the sources pointed out.