Dailymail.co.uk (a site out of the UK) reports to have spoken with an industry source, who is claiming that Apple will unveil an “iPhone nano” in time for the holiday shopping season.

Not many details have been released about the supposed iPhone nano. However, Apple has clearly made it a goal to get the iPhone into as many people around the world’s hands as possible. Our iPhone World Map shows all the countries, carriers, rates and iPhone prices around the world.
The iPhone nano is expected to be targeted at the pay-as-you-go market, giving everyone the opportunity to enjoy the revolutionary user experience the iPhone delivers. “‘The iPhone 3G has been the fastest-selling phone ever in the UK, but it is too expensive to be a realistic proposition in the pay-as-you-go market,” reports Fluendy. Because the pay-as-you-go mobile market does not get subsidized iPhone prices, the release of a genuinely less-expensive device could generate even more staggering sales numbers for Apple.
No details regarding the iPhone nano’s storage capabilities, the inclusion of GPS, 3G, or any other technology that is used in the current iPhone have been given. Although we’d expect the iPhone nano to at least match the current 4GB/8GB storage options the current iPod nano’s offer. Additionally, the inclusion of wi-fi makes much more sense than the GPS chip we now have in the iPhone 3G. And seeing as how global penetration has made it to the top of Apple’s priority list, the iPhone nano would be expected to run on 3G networks. If rumors prove true, it will be interesting to see how Apple markets the new lower-end device.
One expert claims the iPhone nano “would have a touch wheel on the back and display on the front so that numbers would be dialed from behind.”
Although the release of both the original iPhone and the iPhone 3G have proven major successes, Apple’s product diversification can become rather tricky with cannibalization (think iPhone taking sales away from the iPod touch). The iPhone nano could prove to be another major success by directly appealing to a completely different market. A large part of Microsoft’s successful monopoly approach, is their ability to globally get their products into as many people’s hands as possible. With lower-end products such as this rumored iPhone nano, Apple may be well on its way to achieving the same market share success.