Just when you thought Apple couldn’t do any worse that the iPhone, comes the rumor that they are planning to release a less functional version of the iPhone based on the iPod Nano.

This rumor is based on a patent application Apple submitted on July 5th for a multi-function device with a circular touchpad control surface similar to the current Nano. Apple anticipates 10 million iPhones will be sold in 2008, that would be about 1% of the total cellular phone market. A less functional Nano version is speculated to help curb cannibalization of current iPod sales.

I now have a question, since the iPhone doesn’t really do anything more than the current crop of smartphones using technologies from Blackberry and/or Microsoft, why would anyone want to buy one with less functionality? It would appear to me that the only people this might appeal to are Apple fans already. Stranger things have happened!

The full story is available at this link: Apple plans cheaper, Nano-based phone: JP Morgan