My question is how could a smaller touch screen device take advantage of current apps? 99% of current apps (including Apple apps) demand every inch of screen space to be usable.
20% screen size reduction or more would be totally useless.
Maybe same screen with even less physical casing ie: no home button or sensor sections?
Aren't apps and stuff tied more to the resolution of the screen, not the size? Like with your PS3 (or 360 or Wii or whatever), not everyone has the same size TV screens, but all those TV screens will display the games in the same (or correct) resolutions.
So as long as the resolution of any hypothetical iPod Touch Nano or smaller touch screen device is the same as the current iPhone/Touch, the apps should work, right?
Granted, the screen would still be smaller, and for some that'd make it bothersome and a lot harder to see, but still...technically it could work, right?