Everyone’s been speculating about the rumored Apple iPhone, whether it exists and what it will be. This is my hunch as to what they are working on.
Try holding a Nano as if you were talking on a handset. It’s just about the perfect size and form factor to double as a nice phone, without any major modifications to the case, except maybe to add a dialpad for numeric dialing and texting. Other than that, it got everything that’s already needed.
The problem is that it will be difficult to cram all of the cellular electronics and extra battery into this case, so if they decide to make an all-in-one device, they’ll need to make the device bigger and clunkier, more like a Treo or Nokia phone, and less like an iPod. They’ll also need to deal with different mobile networks (different device product lines), and with the mobile operators. The handset business is pretty brutal, and while if anybody has a shot at breaking into it, it’s Apple, I am not sure that’s a business they really want to be in.
On the other hand, you could just add a Bluetooth/WiFi chipset to the device, pair it with whatever carrier issued phone you carry around. Use the iPod as a Bluetooth handset/headset. Use the phone as a fast wireless modem. Done. With one device you can then link to any network via a Bluetooth enabled phone, which most are. Apple would still need to work with carriers, to make sure they do not cripple the use of the Bluetooth modem interface, but this is a vastly simpler task for them than building, certifying and shipping their own phones via hundreds of different operators worldwide. With this approach they can make one device, and then publish a list of phones that it is known to work with.
Who knows what they are actually working on, but I hope that if there is an iPhone in the works, it’s something like this.