O2 Insider Confirms Christmas Release Of Apple's iPhone 'Nano'

A Sunday British Newspaper has learnt that Apple's iPhone partner, Telefonica owned mobile giant O2, is preparing a shrunk down version of the popular iPhone.

The device which is expected to hit the stores just before Christmas will be available to PAYG users for around GBP150 and, a source close to the company confirmed to Sunday's Dailymail, will be a 'big one'.

The iPhone nano will be a dumb down version of the current iPhone 3G, a clear indication that Apple plans to implement the same strategy that made the iPod range its most successful products ever.

There has been a number of rumours circulating over incoming Apple Products especially as the back to school period nears in the US with a 64GB iPod Touch and a slightly elongated iPod nano amongst the most commonly mentioned.

The nano iPhone may have a touch wheel interface with the screen on the opposite side, which means that numbers would be dialled from behind and because of phone's minuscule format, it is unlikely to have full Internet browsing functionality.

The iPhone 3G is also scheduled to be released as a PAYG model in the next few months but will almost certainly enjoy a limited success because of its initial price.

More on that as the story unfolds.