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JPMorgan: Next iPhone based on iPod Nano design

A financial analyst out of Taiwan is predicting that Apple will have a cheaper iPhone based on the iPod Nano design released by the end of the year.

Speculation about iPhone 2.0 is already well underway, and the latest tidbit involves an iPod Nano-like phone supposedly scheduled for later this year.

Kevin Chang with JPMorgan Chase in Taiwan thinks a slimmer iPhone is on the way, based on conversations he had with unnamed sources and an Apple patent filing for a slim device that uses an input method similar to the familiar iPod scroll wheel, Reuters reports. This would allow Apple to ship a cheaper version of the original iPhone, he said.

Could the iPod Nano be the template for iPhone 2.0? Apple

I'm not sure what to make of this one. The iPhone's main selling point is its touch-screen interface; why would Apple come out with a crippled version of that so quickly? Chang notes that a scroll-wheel iPhone would have "rather limited functionality," but that seems to be putting quite a gloss on the pitch. Maybe Apple's bringing back rotary dialing?

Still, a smaller iPhone could help Apple make inroads into places like Europe and Asia where shoppers are accustomed to sleek, powerful phones. But it would seem quite an engineering challenge to get all the necessary components into a device the size of the iPod Nano. Motorola's Razr phones come to mind, but they didn't use the same touchscreen interface and they weren't running Mac OS X, which means they could have gotten away with slimmer and less powerful chips.

This isn't the first reference to iPhone 2.0. Another report surfaced in May claiming that the second-generation iPhone would use a different design on the outer shell of the device. And the European version of the iPhone, which Apple has said will arrive later this year, is almost universally expected to run on the faster 3G networks prevalent across the pond.