When Sony announced the BDP-S300 player in February, it put the price at $599, but it has now set a list price at $499 which will go on sale this month. That means the new player costs half of what the company's first Blu-ray player cost when it launched just six months ago - probably one of the fastest price declines in the consumer electronics industry.

The price cut is due to falling production costs and the growing demand for Blu-ray products, according to Chris Fawcett, vice president of Sony Electronics' home products division.

Sony has been undersold in the market for high-definition disc players by Toshiba, which created the rival HD DVD format. Its players are now selling for less than $300.

Neither Blu-ray nor HD DVD players have caught on strongly with consumers, who have been waiting for the market to settle on one of the formats. But dropping prices for players and HDTV sets in more homes mean a big showdown between the discs may be looming this holiday season.

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