Virtual Whistler

Apple is about to launch a 'nano' version of the hugely successful iPhone. It is expected to be in the shops in time for Christmas.

The product will be launched in the UK at up to £150 for pay-as-you-go customers by O2, the mobile phone group owned by Spain's Telefonica. 'This will be a big one,' said an industry source.

'The iPhone 3G has been the fastest-selling phone ever in the UK, but it is too expensive to be a realistic proposition in the pay-as-you-go market.

'However, a cut down version, with the candy bar shape of iPod nano music players, would be a huge hit as a Christmas gift.'

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.