Apple’s rumored ‘iPhone Nano’ sounds like a very limited device, according to Cult Of Mac:
The iPhone nano will have no memory for onboard storage of media, our source says. It will have only enough memory to buffer media streamed from the cloud.
“I’m talking strictly storage memory here,” said our source.
The iPhone nano will pull ALL it’s content from MobileMe. When users buy a movie or TV show on iTunes, it’s available to stream to their iPhone or iPad. The service is based on technology from LaLa.com, a streaming service that Apple bought last spring and then shut down.
Presumably, watching movies and playing games outside of a wi-fi or data coverage area will not be possible. Sounds like a big step backwards. If the main consideration is cost, competitors are able to offer Android smart phones that are significantly cheaper than the iPhone, complete with ‘real’ storage – expandable in many cases with Micro-SD cards (something apple has refused to offer on any iPod or iPhone, ever.).