According to UK newspaper the Daily Mail Apple is about to launch a 'nano' version of the hugely successful iPhone with the unit expected in stores in time for Xmas. The product which is designed for the pay as you go market is set to be hot with the device able to play music make calls and provide basiccommunication services. Alsao tipped from Apple pre Xmas is a tablet PC which will also act as a home control system.

 'This will be a big one,' said an industry source.Analysts say that a nano version of the iPhone is expected to outstrip sales even of the original. Two Taiwanese Companies contacted by ChannelNews have said that Apple has engaged component consultants to source a variety of components including components for the building of a notebook type device that will also act as a home controller for automation and entertainment control systems.

"Apple have a lot in the pipeline at the moment" said a Taiwanese manufacturer. several Taiwanese Companies are aware of some potentially big contracts for Apple for both new phones and other devices they said.

'The iPhone 3G has been the fastest-selling phone ever in the world but it is too expensive to be a realistic proposition in the pay-as-you-go market. 'However, a cut down version, with the candy bar shape of iPod nano music players, would be a huge hit as a Christmas gift.'

One expert suggested the nano phone would have a touch wheel on the back and display on the front so that numbers would be dialled from behind