Following on from last week's JP Morgan claims (and subsequent denials ) that a cheaper Apple iPhone nano was on the way, there are renewed reports this morning that such a device might actually arrive later this year.

Citing 'extremely reputable' sources, AppleInsider reports that Apple has been developing a second handset, dubbed the Apple iPhone nano, ever since it started producing the first Apple iPhone . The Apple iPhone nano may even go on sale in time for this year's Christmas season.

The second Apple iPhone is said to be of a smaller form factor and combine Apple iPod functionalities, such as the click-wheel interface, with basic mobile phone features.

The Apple iPhone nano is expected to be much cheaper than the current handset, which is currently available in the US for $499 (£244) to $599 (£292), depending on model.