So, this isn't the first time a rumor involving a smaller iPhone has been circulating. In fact, about a year ago, talk was high that we'd be seeing an iPhone Nano for Christmas. But this time the DailyMail.co.uk is reviving the speculation.

This tiny iPhone would have the distinctive candy bar shape and would be targeted to the pay-as-you-go market, to which the iPhone and iPhone 3G were a bit too pricey. This is all fine and well, but one thing makes my suspicions rise and makes me want to call this rumor bogus: 

One expert suggested the nano phone would have a touch wheel on the back and display on the front so that numbers would be dialled from behind.

Um, I just don't see that happening, do you? Oh, and that photo is from when we all thought an iPhone Nano was coming last year. It's fake, fake, fake.

[via MacRumors]