'iPhone nano' rumors gain momentum

We've been hearing rumors about a so-called "iPhone nano" for a while, but now the folks at AppleInsider claim they have information from "extremely reputable sources" that confirm the device's existence. According to their sources, development of the iPhone nano has followed closely behind that of the regular iPhone, and the device is said to have been making its "final pass through engineering" back in May or June when the iPhone was hitting manufacturing.

The new device is expected to be smaller and have fewer features than its predecessor—AppleInsider mentions a combination of iPod features and "rudimentary cellular capabilities" with no Internet browsing or e-mail. More limited functionality should contribute to a price tag well below the $500 mark, and the device's retail availability may not be limited to Apple and AT&T stores as with the current iPhone, either. AppleInsider says the iPhone nano's release date is set "just a few months" after that of the original iPhone and that it will appear before the holidays.

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