With MacWorld 2009 imminent, the rumor mill for Apple fans are hard at work again. This time around, the biggest rumor is that there will be an iPhone Nano introduced at MacWorld.

Right now, sites like MacRumors.com are very skeptical about an iPhone Nano launch:

"We have some serious doubts about the likelihood of such a device. These doubts are based both in the quality of the sources as well as the practicality of introducing a new form factor to the iPhone/iPod Touch platform."

This echoes Tom Krazit’s perspective, from CNET.

I have a different perspective. Coupled with the iPhone Nano case rumors from a couple of days ago, I think there is a good chance that this will happen very soon. My opinion of an iPhone Nano launch is that it is only a matter of when and not if, for Apple to introduce such a device. Introducing a smaller, cheaper, and lower-end version of the iPhone certain makes sense for Apple so they can broaden their product portfoilio in the smart phone space. If they do, their strategy will be exactly the same as what they did with the iPod music players.

The key question will be how Apple will position such a device. Is it a low cost alternative, or is it targeted at a different customer segment?  Other than the form factor, what other differentiators will it have compared to the iPhone 3G?

If Apple were any other company, introducing a new product in the iPhone product line right now is probably a non-starter because the iPhone is still selling so well. However, Apple has shown time and again that it isn’t afraid to cannibalize its own market share. Frequent introductions of new iPod models are great examples of this, when Apple dominated the music player market. This is something I have tremendous respect for with Apple. They are not afraid to take risks, out-innovate themselves and cannibalize their own success. This is not true for many high-tech companies.

What is your take on the iPhone Nano?

- J.

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