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Is Apple Planning A "Mac Nano?"

A Chinese company says it's producing a case for an upcoming iPhone Nano. Bits of code inside the latest version of OS X suggest a new Mac Mini. Are they one in the same?

Apple [AAPL] has been mum about both rumors. But XSKN, a manufacturer of rubberized protective cases, has been right about forthcoming Apple gadgets before; the company's product line successfully predicted both the iPhone 3G and the iPod Touch. Now XSKN is selling a case for an "iPhone Nano" that it says will have a 2.75-inch screen and no 3G wireless. Judging by XSKN's image, the iPhone Nano would look like a thicker, broader version of the current iPod Nano.

Of course, this doesn't make sense with what we know about Apple.

First there's the issue of network speeds. Why would Apple take a step backwards and offer a 2G phone? The whole purpose of the iPhone 3G, the first truly usable Web-integrated mobile phone, was to take advantage of 3rd-party apps that seamlessly and speedily connect to the Internet. At this point, a 2G iPhone wouldn't be an iPhone at all, because it would render a lot of the app store programs frustratingly slow. Another 2G iPhone would be a step backwards.

And so what if it's cheaper? The iPhone isn't that expensive to begin with. If you deem $200 too much for a smartphone, then you can knock it down to $150 just by getting a refurbished model. Every other smart device out there — G1, BlackBerry, HTC Touch Pro — is at least that expensive. If you still think that's still too much, you probably don't really need a smartphone.

Assuming it would fit into Apple's current iPhone price structure ($300 for the 16GB, $200 for the 8GB), the iPhone Nano would come in at $100 for a 4GB device — and that's counting the subsidy you'd get from buying a 2-year plan from AT&T [ATT]. $100 plus a 2-year contract for a 4GB media player with 2G Internet access? That's a crappy deal, considering an iPod Nano is only $150 at 8GB, and doesn't require you shell out $75 a month to AT&T.

The other big Apple rumor this week is concerned with a new Mac Mini, Apple's long-neglected bare-bones computer. The last time the Mac Mini was updated, Barack Obama was still a long-shot senator from Illinois; many rumor sites have proclaimed the Mini dead. But Macrumors has discovered strings of code in the most recent version of OS X that refer to a Mac Mini version called "3,1," which doesn't yet exist.

Could the new Mac Mini and the "iPhone Nano" be the same device?

Imagine a palm-top CPU with a notebook graphics card and a system-on-a-chip operating system — think of it like an iPhone with supercharged graphics. It would have a WiFi chip, run the iPhone version of OS X, and pack, say, 16GB of solid-state memory. It would have a multi-connector dock that could link it to a display and to USB peripherals, but it would also have a small display that would allow you to use it stand-alone to play videos and music. Of course, it wouldn't have wireless broadband, since it wouldn't be tied to a carrier — hence XKSN's claim that it has no 3G wireless. It's not a Mac Mini, or an iPhone Nano. It's the Mac Nano.

It could do all the duties of a portable media player, but also power a full-sized screen and do basic Internet surfing, email, games, and anything that its 3rd-party apps allow it to do. It could hold plenty of music, a smattering of documents and photos, and even a movie or two. Sure, it's no MacBook, but for a price of about $500, you could have your Mac and your media anywhere.

Will Apple take the Mac Nano plunge? Only Macworld will tell.