While various media outlets seemed confident that Apple was certain to release an iPhone nano, an anonymous source has told the New York Times that “Apple is not currently developing a smaller iPhone,” and that the company is “not planning to introduce a smaller iPhone anytime soon.” Per Engadget, the Times doesn’t outright deny the existence of such a device at any point in the story, it does quote an anonymous Apple executive as saying that it doesn’t make sense for the company to create multiple iPhone form factors at any given time, and an anonymous Apple engineer as saying that cheaper components, not a smaller size, would make for a cheaper overall price.
One thing’s for sure: either Apple’s making one, or it’s not.
In related news, the Times’ sources corroborate the idea that Apple will make MobileMe free, and say that the next full-sized iPhone is nearly complete.