While we may see one someday, don’t count on the release of an iPhone nano in 2011.
According to The New York Times, Apple “was not planning to introduce a smaller iPhone anytime soon.”
One piece of news that still seems valid: An improved MobileMe is coming. It will allow users to store music, photos, and files online in the “cloud.” Best of all, the Times reports Apple will make this available for free. They currently charge users $99/year for a must less robust service.
Perhaps instead of offering a stripped down version of the iPhone, Apple will offer the real deal at a cheaper price.