As Jared reported on Thursday, rumors are back that Apple is working on an “iPhone Nano”–a smaller, cheaper phone designed to be sold without a carrier contract. (The idea dates back to at least 2008, but the media outlets writing about the latest version–including The Wall Street Journal and Bloomberg–give it new credibility.)

Now Leander Kahney of Cult of Mac is reporting a new twist: The “iPhone Nano” supposedly has no storage, and instead streams entertainment from the cloud, using the technology Apple picked up when it bought (and shuttered) LaLa.

As Leander says, the notion of an iPhone having no storage doesn’t make sense. But maybe it has the bare minimum it needs to function, rather than the massive amounts–4GB, 8GB, 16GB, or 32GB–that are mandatory for phones that store music and movies locally.

I’m lousy at gauging the veracity of Apple rumors, but if there’s going to be a smaller, cheaper iPhone, the possibility that it’s radically different from the current iPhones has a ring of truth about it. There’s a limit to how much Apple could cost-reduce the basic iPhone design while still producing something that feels anything at all like the current model. And it doesn’t sound Apple-esque to shrink the iPhone’s screen meaningfully and maintain the current interface–right now, everything about the iPhone version of iOS assumes the presence of a 3.5″ screen.

So maybe the upcoming iPhone, if it exists, is less of an iPad Nano (something similar but smaller) and more of an iPhone Shuffle (something altogether different, and so minimalist that it’s a shock to the system). When the iPod Shuffle was released in 2005, the concept of an MP3 player with no screen sounded…well, nutty. But the device has been through multiple incarnations and is still available today, even though the more capable iPod Nano now goes for the same $149 that the 1GB Shuffle originally did.

Normally, you think of Apple as a company that’s unwilling to cut features to hit a particular price point–that’s why the cheapest MacBooks are still a not-so-cheap $999. In the case of the iPod Shuffle–especially the original version–it got over its reluctance to cut features by cutting almost every feature.

It’s still difficult to deal with the idea of an iPhone so basic that you can’t store songs on it. But with the iPod Shuffle in mind, I don’t think we can reject such a phone as an impossibility. And it might be more plausible than an iPhone that’s a lot like the current model, except in a smaller case with a lower pricetag.

 
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