This is fresh off the iPhone rumor mill, but comes from a reputable market analyst.

Kevin Chang, a JP Morgan analyst based in Taiwan, cited "unamed people in the supply channel", as well as a recent application to the US Patent and Trademark office in his report.

It seems that Apple Inc. has filed a patent application for a "multi-functional handheld device" with a circular touchpad that closely resembles the scroll wheel on the iPod Nano.


"We believe that iPod Nano will be converted into a phone because its probably the only way for Apple to launch a lower-end phone without severely cannibalizing iPod Nano," he said noting that the new phone could have "rather limited functionality."


The iPod Nano is by far the most popular iPod format, so by converting the Nano into a phone, Apple hopes to score again with consumers, and could easily sell 30 to 40 million iphone Nano units in 2008, due to the lower price.

Apple has targeted sales of the first iphone of 10 million units in 2008 -- or approximately 1% of the global phone market.

http://www.hotiphonenews.com/blog_9.shtml

Apple will make a killing off this iPhone stuff so long as there are idiots who will flock to the stores wanting to pay the price to be cool.

Regards,

Lee