iPhone Nano rumors: Should Microsoft and Nokia be prepared for a feature phone battle?

Rumors of an iPhone Nano should be enough for Microsoft and Nokia to step up their games in the event that feature phones become the new target for Apple's empire.

I realize that this whole iPhone Nano chatter working its way through the blogosphere is just that - unconfirmed chatter. But let's run with the idea and consider for a moment that, if done right, a pint-sized iPhone could potentially revamp what is still the biggest market in mobile phones - the feature phones.

Feature phones, as they exist today, are largely scaled-down Web-enabled versions of the smartphones, equipped with the tools they need to bring up the sports scores, offer you some headlines, let you play some games, shoot some pics or even watch some videos. Facebook is even making it possible for feature phone carriers to do some social networking from these devices.

These sort of capabilities already exist on feature phone but the user interfaces have long been clunky as users tap a four-way navigation button like they're hammering out morse code just to see a gallery of the photos on the device. There has to be a better way - and, if anyone can find a way to improve the on-screen user experience, it's Apple.

Remember, the iPod was not the first portable mp3 player. But it took over the market because it wasn't afraid to wipe the slate clean and start fresh with a new approach to the user experience on both the device and the computer-based software that managed the content - iTunes. Apple's iPhone also wasn't the first smartphone. There were others on the market before Apple - once again taking a fresh approach to the user interface - launched the iPhone and redefined what a smartphone should be.

While all the buzz may be around smartphones, they only account for about 20 percent of the global market, according to IDC data from late last year. Feature phones dominate in other parts of the world - notably, Asia and Latin America.

Here's where it gets interesting, though. The recently announced partnership between Nokia and Microsoft really should be kicking into high gear if there's any indication that Apple might have its sights set on redefining feature phones in the form of an iPhone Nano. As my colleague Jason Hiner noted in a post this morning, Nokia remains a big player in feature phones and has a reputation for quality hardware. But the software, Hiner said, has been lacking for years. That's where Microsoft, which has been marketing Windows Phone 7 as a platform for giving you quick access to what's really important in your life, comes into play. Together, Nokia and Microsoft can shake up the feature phone market by delivering what each of them does best.

Unless Apple does it first. Or better.

It's a big world and certainly there should be plenty of market share to go around between any and all players that want to come in rock the feature phone market. But, given what we've seen Apple do to the mp3 player and smartphone markets, it's worth waving a red flag in front of Microsoft CEO Steve Ballmer and Nokia CEO Stephen Elop at this point in the game.

Apple may very well be on the prowl, fellas. If you're thinking about taking your time on rolling out this partnership, you might want to think again. Even the hint that Apple may be sniffing around that market that you had your eye on should be reason enough to kick things into high gear.

Consider yourself warned.

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