The iPhone Nano rumor sends Apple soaring

Even Kevin Chang's colleagues don't agree with him, but Wall Street loves the analyst's suggestion that Apple will release a low-end phone.

Published July 10, 2007 8:13PM (EDT)

As far as we know, Apple's iPhone Nano -- a smaller, cheaper version of the iPhone that's based on the company's iPod Nano -- exists, for now, only in the high-tech fairy land. The idea hit the news yesterday after a single analyst -- Kevin Chang, JP Morgan's man in Taipei -- told investors in a note that his anonymous sources pointed to some such device later this year. In an interview with Bloomberg, Chang elaborated that he thinks Apple will release the Nano Phone through many carriers, not just through AT&T, and that the wide distribution channel will allow it to sell as many as 40 million units by the end of 2008. "We'll see this new iPhone having a noticeable impact on the handset market," he said.

High-tech fairy land sure sounds like a wonderful place, doesn't it? So wonderful that today traders on Wall Street decided to relocate there. Chang's sixth sense sent Apple shares rocketing to an all-time high of $134.50. (They've since come down slightly.) And this is despite the fact that some people are throwing gallons of cold water on Chang's Nano idea.

For instance, Bill Shope, JP Morgan's Apple analyst, cautions folks to be wary of Nano phone rumors. That's right, this guy is Chang's own colleague at Morgan: "The potential for a low-end, subsidized phone from Apple seems unlikely in the near term," he told investors in a report. "Perhaps Apple will choose to eventually replace its iPod family with phones over time, but it could be premature to assume this will happen in volume any time soon."

By Farhad Manjoo

Farhad Manjoo is a Salon staff writer and the author of True Enough: Learning to Live in a Post-Fact Society.

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