As for a smaller iPhone I think thats really stupid. A cheaper model would be a nice addition but making it “nano” like would be a mistake for the season reason mike said, the screen would be too small. Same reason why the iPod Nano doesn’t play movies. No one wants to see movies on a 1″ screen. Let alone email, and the web. I can only see one iPhone with varying drive space.

“Hrm. How did the iPod nano come about? Oh, yeah. They killed off the mini: the best-selling iPod brand, style, and price point at the time.”

The iPod Nano was simply the next generation of the iPod Mini…they didn’t kill off the line. That’s like saying the color version of the Video iPod killed off the previous iPod line because they were thicker and monochrome.

What we’re talking about here is a completely different product that would double the price of an iPod nano.

Hrm. How did the iPod nano come about? Oh, yeah. They killed off the mini: the best-selling iPod brand, style, and price point at the time.

B) Making an Apple phone that can’t do any of the amazing stuff that the iPhone does except play music?

Some people don’t like a phone that tries to be everything. I myself have a phone that only makes calls and SMS, and nothing else. No games, no camera, just a plain old phone. Build an iPod into it, and I’d swap my old phone in for it. Not that I wouldn’t want a regular iPhone, but some of the features on that (camera, YouTube, etc.), I’d never use.