The problem of fakery is becoming as serious for phonemakers as fashion designers, but usually knock-offs and copies only appear once a device has actually launched. iPhone forgers are going a step further and producing versions of the iPhone Nano, a product that nobody has even confirmed is in the works, let alone unveiled.

Rumours that Apple would create a small, low cost version of its smartphone, as it did for its iPod music player, have been circulating for months, and like the alleged Apple netbook, have gained new strength ahead of next month's MacWorld show, where the vendor often debuts its new launches. Before we find out whether the 4Gb iPhone Nano is real or not, consumers in Thailand can get their hands on a fake, built to fit the descriptions circulated by the Nano rumourmongers. These 'copies' are now appearing in other Asian countries and are expected to reach Europe after the new year.

Many of the fake Nanos sport the official Apple logo and iPhone labeling and branding, according to Apple Insider, and have a similar operating system with the same icons and wallpapers.

Meanwhile, what are the odds that we'll be able to buy a real iPhone Nano in 2009? Some observers believe an iPod Nano Touch is more likely, featuring Wi-Fi but not 3G and so less likely to cannibalize the smartphone's base and upset the exclusive carrier partners. XSKN, which makes accessories for Apple devices, has sparked new talk of the miniature systems, by releasing pictures of protective cases that it has made, which would fit Nanos.

However, a smaller iPhone might be hard to position, since much of the success of the original device lies in the way it makes web services and functions like gaming easier to use, which would not be the case with a smaller screen and, presumably, a stripped-down feature set. There will be even less place for the Nano in the market, when iPhone prices are falling so rapidly. In the US, exclusive carrier AT&T has introduced a $99 version, and UK users may well see a similar move from O2 (though they can already get a full sized iPhone for free if they sign up for the right data contracts over two years).

Apple may well look to broaden the iPhone range over time as it did with the iPod - introducing the Shuffle, Nano and Mini - but a small candybar may not be the way to go, and some Mac watchers are suggesting the real hit would be a clamshell design, emulating RIM’s release of the BlackBerry Pearl Flip.

Meanwhile, in other iPhone news over the holiday season, Apple has filed for a patent revolving around four swipe gestures for touchscreen virtual keyboards. This would enable a product like the iPhone, instead of being limited to the touches of specific keys, to detect a general swipe movement and interpret it. This would augment simple taps, adding an interpretation layer similar to Palm's venerable Graffiti to the standard iPhone keyboard.

And finally, Steve Jobs can sleep easy knowing the iPhone has the blessing of the Pope. The Vatican has officially endorsed an App Store application called iBreviary, which allows users to load the Breviary prayer book and various other Roman Catholic prayers.