That Apple will launch an iPhone nano, a smaller possibly less-featured version of its popular iPhone is a rumour that has not gone away, but new reports from sources in the Taiwan handset supply chain have recently reignited talk of such a device.

In a nutshell, it seems Apple is busy prepping a 2.8-inch (compared to the current 3.5-inch) version of the iPhone that will boast a new Qualcomm chip that will mean it will work globally on both UMTS 3G and CDMA mobile phone networks.

Said to be due to Verizon in Q3 of 2010, despite the operator's continued iPhone bashing, the iPhone nano is said to be planned for worldwide distribution too - a single handset to all carriers, regardless of the tech of their network.

AppleInsider's source, OTR Global, says that Asustek subsidiary Pegatron will build the new hybrid phone devices for Apple rather than Hon Hai, the iPhone's current manufacturer and that "Verizon and Apple have already hammered out an agreement to sell the new iPhone model within the year".