another iPhone?

JPMorgan analyst Kevin Chang claims that Apple will be releasing a "Nano" version of its popular iPhone. Sources for the claim included "people in the supply channel", as well as a filing with the U.S. Patent and Trademark Office.

What filing, you say?

"Apple (Charts, Fortune 500) filed a patent application document dated July 5 that refers to a multifunctional handheld device with a circular touch pad control, similar to the Nano's scroll wheel."

Chang contends that a smaller, cheaper version of the iPhone would be Apple's only way to capture the lower end phone market and push sales to the 30-40 million unit level by 2008. To which I say: smaller? Can the iPhone even get any smaller? And we're not talking about a miniscule 0.03" smaller like certain Chocolate phone models.

Getting back on track, a cheaper iPhone would be dangerous to the established phone makers Nokia, Motorola, Samsung, and especially Sony Ericsson. Apple's already proved that it can sell $600 cell phones that no one knows jack squat about, other than the fact that it's round and has a touch-screen. I mean, Apple could announce a new line of bubble gum and hordes of people would line up to buy it.

As usual, an Apple spokeswoman declined to comment on Nano-sized phone speculation.