Reports of an Apple iPhone nano arriving by the end of the year may be premature. A 3G iPhone is the most likely next model, according to a second analyst report by JPMorgan . The prediction dampens iPhone nano speculation sparked earlier by another JPMorgan analyst, Kevin Chang.

Chang's report prompted instense speculation that a smaller version of the iPhone, an iPhone nano-style product, would arrive by the end of this year. Chang had quoted supply sources in Taiwan and referred to a recent US patent application by Apple for a product that looked like the basis of an iPhone nano.

However, a second JPMorgan report by three US-based analysts dismisses Chang's suggestion that a low-end iPhone was next on Apple's roadmap, saying it was "unlikely in the near term".

The second report, republished on The Unofficial Apple Weblog , says the analysts were unable to corroborate Chang's source in Asia. They also questioned his reference to the recent patent application. Apple often files patents that have give little indication of actual upcoming products, the analysts said.

Low-cost iPhone inevitable

While the latest JPMorgan report conceded that a low-cost iPhone was inevitable, it suggested that a move in the near-term would be unusual and highly risky for Apple. It took Apple two years after the iPod's launch to release the lower-end iPod Mini.

And as not everyone wants a combined music player/phone, Apple is likely to maintain the iPod and iPhone as two business segments. Introducing an iPhone nano too early would risk undercutting the highly lucrative sales of iPod nanos, effectively cannibalising sales.

The JPMorgan report concludes that the next version of the iPhone is still most likely to be a high-priced 3G version . It expects it to come early in 2008, although an earlier release date is possible.