Yeah, I don't really see the point in an iPhone nano, unless they are pursuing a super-aggressive pricing strategy (i.e. "Free with AT&T contract"). Of course the phrase "super aggressing pricing" and "Apple" don't really belong in the same sentence. Assuming that the iPhone nano would be mega-cheap (or free), how can they slash $200 worth of production costs out of the phone without completely neutering it or splintering the software development community? I guess they can remove the 3G and the GPS, but that sort of ruins what the iPhone experience is meant to be.