Apple (AAPL) iPhone Nano Coming This Christmas? Probably Not

Apple fans were buzzing this weekend over a rumour that Apple (AAPL) was set to release a smaller version of the iPhone, an iPhone Nano, by Christmas. The rumour appeared on CNet and was published in Britain’s The Daily Mail, with an accompanying quote from an unamed “industry source.”

But the rumour has been met with considerable scepticism, and a cheaper iPhone really doesn’t make sense for Apple right now. Philip DeWitt at Fortune explains why:

[A]lthough an iPhone that retailed for say, $99, would break open the market to a huge block of new customers, Apple has no reason to sell one as long as people are still lining up to buy a $199 model that Apple can’t make fast enough to meet demand.

“This rumour still doesn’t make any sense to me for this year,” wrote a British investor who calls himself sleepygeek. “Taking features out of the current iPhone loses $10 or more of revenue for every $1 saved in build costs. iPhone Nano would have to outsell iPhone by a large factor (5 -10 times the sales) to make sense.”

So no joy for Appleville. But as DeWitt suggests, we may have better luck with an iPhone Shuffle:

One wag on AFB suggests that Apple might also introduce a “shuffle” version of the iPhone. It would clip to your lapel and dial phone numbers randomly.

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