Do mp3's promote to slavery?

I have a little electronics business designing and making audio electronics. It's a one-man outfit that just brings in enough to pay the bills. I was toying with the idea of making a small mp3 player but found that this is nigh on impossible if I am to make any money.

Mp3 is of course a patented technology which means that the decoder chips required for any circuit are stupidly expensive for what they are (the cheapest option is around 13 pound for a single STA013 chip, whereas the actual cost of producing one is less than a few pennies). This means that the only way to make an mp3 player profitable is to produce them in bulk using cheap Chinese labour and hope to god that enough are sold that the investment can be made back. Needless to say, this is not feasible for the little guy such as me (not that I would want to stoop so low as to engage in what is effectively slavery).

So to what extent does the patent system slant the market in favour of big corporations who are in a position to take advantage of these 'economies' of scale? How many small businesses and individuals could be making a living from producing such products if this patent did not exist? To what extent are poor working conditions abroad perpetuated by intellectual property? My feeling is that the impact is great