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iPhone nano rumours scotched, but cheaper iPhone may be coming

Recent rumours that Apple is making a smaller version of its iPhone have been debunked by the New York Times, which suggests instead that the company is working on a cheaper full-sized version.

Alas, iPhone nano. We barely even knew you at all from online speculation, before you were cruelly snuffed out by... Well, by new online speculation. Still, it was fun while it lasted.

A lengthy piece in the New York Times rubbishes reports of a smaller iPhone, suggesting instead that Apple is investigating ways to make a cheaper full-sized version by using less costly internal components.

Why no iPhone nano? According to the NYT's sources, it wouldn't necessarily be cheaper to make, it might be more difficult to operate, and more than 350,000 apps would have to be rewritten for the smaller screen. So much for that, then.

The article suggests instead that Apple wants to make the iPhone even more mainstream by making a cheaper version. "Although the innards of the phone, including memory size or camera quality, could change to offer a less expensive model, the size of the device would not vary," claims one source who has worked on the handset.

The iPhone nano rumours hotted up earlier this month when Bloomberg and TechCrunch both published claims that a prototype of a smaller iPhone exists, and could come out this summer. Bloomberg said the device was a third smaller than the iPhone 4, with no physical Home button.

A few days later, the Wall Street Journal started banging its own jungle drums, claiming the new device was "about half the size of the iPhone 4", with "an edge-to-edge screen".

All of these reports could be correct, of course: it would not be surprising if Apple had created a prototype of a smaller iPhone, and it would be equally unshocking if the company had decided to shelve the project if it did not meet up to its expectations.

One thing everyone agrees is that Apple's MobileMe service is going to be a big part of the iPhone 5 and any other new Apple devices this year. The New York Times confirms the earlier claims that a revamped version of MobileMe will be free, and much more focused on syncing media across iOS devices.

"The goal is that your photos and other media content will eventually just sync across all your Apple devices without people having to do anything," says the NYT's source.

Earlier this week, separate reports suggested MobileMe will also add Foursquare-style check-ins and a real-world geotagging service codenamed Tokens, sucking in activity from Apple's Ping and Game Center social networks too.