I bet that when you picture an iPod you absolutely don't think of the current iPod Nano. You probably imagine a classic iPod or perhaps the new iPod Touch (which, by Apple's own numbers ) is keeping the iPod revenue stream still flowing even as the MP3 player's relevance declines . But if some of the current rumblings prove correct, you may be making a mistake because the Nano could be a secret weapon to introduce iPods and iTunes to a whole new audience.
Essentially the rumors  are saying that Apple's got a hot new redesigned iPod Nano on the way, which may be revealed at a Fall news event that looks more and more like it'll happen September 12th . A redesigned Nano, let's get this straight right away, is entirely plausible. Apple's not adjusted the design since the device debuted in Fall 2010, and to stir up customer interest a redesign and added features would seem a natural and very Apple idea.
Some of the most intriguing rumors  coming from Apple's Chinese suppliers say the new Nano will ditch its current tiny, square form factor in favor of a slightly larger screen. And there'll be a home button on the front too. And that fact really does imply one fascinating idea: Apple may be bringing a more feature-complete edition of iOS to the Nano--there's really no other need for a home button, since the current Nano works with a faux-iOS multi-touchscreen interface that's designed to not need a home button.
The current Nano is one of the neatest, simplest devices Apple makes. It has so few parts that iSuppli estimated  its bill of materials and cost of manufacture was only around $45 for the 8GB model back in 2010, and it's likely that Apple's effected production line efficiencies since then. Since the 8GB edition sells for $129 that's a significant markup for Apple.
But the Nano is just a plain old dumb MP3 player, albeit with a few additional skills like a built-in pedometer and Nike training "app". It's only other revenue stream to Apple comes from music bought via iTunes and synced to the device by cable. If Apple chose to increase the capabilities of the Nano slightly by using a more powerful CPU and a slightly bigger battery to power it (one of the reasons for a bigger case) it would increase the BOM only by a fraction...and yet it could allow a "proper" installation of iOS, which would mean apps. And thus more money for Apple.
The idea even works from a consumer level: An uprated Nano would be a much more useful device, and with the addition of a few more motion sensors it could become a serious fitness training device as well as compete with the growing number  of smartwatches  that are coming on the market. If Apple pinned its price at a low level, it would also act as a cheap gateway device to get even more people used to the idea of iOS and apps via iTunes. If the Nano came with Apple's rumored new small dock connector, it may even be a cheap and cheerful way of defusing some of the fuss about the company's decision to move away from its traditional 30-pin iPod dock.
Basically, a smarter iPod Nano could re-invigorate Apple's iPod business, and bring a little additional revenue, for very little cost or effort on Apple's behalf--because its iOS apps and iTunes infrastructure is already there, and it has expertise in adapting iOS for the different needs of devices from the iPod Touch through the iPad to the several editions of the iPhone currently on sale.
That's not to say Apple will do this, of course, as under Tim Cook Apple may prove to be more mercurial than ever. But it does seem like a super-smart idea, doesn't it?
[Image: Flickr user jasonbache ]