Where can the iPod nano go from here?

From Artstechnica:

Stocks of the iPod nano appear to be dwindling at retailers across the country, suggesting that Apple is planning to update the tiny music player soon. 9to5Mac spotted shortages at Amazon, Target, Walmart, and Best Buy—a common indicator that a product is about to be refreshed by Apple.

The sixth-generation iPod nano was released in 2010, a radical departure from previous nanos. Not much larger than the iPod shuffle, the sixth-gen nano is dominated by a small square touchscreen with limited multitouch abilities. Though it includes an iOS-like interface, it still runs the same Pixo OS that powered previous nanos as well as the iPod classic.

Apple didn’t bother updating the nano (or really, any iPods) in 2011 aside from a slight price drop and a few software changes, such as the addition of a Nike+ fitness app. But the short supply of the current nano suggests Apple may have something more in store this year.

Where exactly Apple could go with the nano, though, isn’t clear. Apple embraced the small “watchband” industry that sprung up around the sixth-gen nano by adding several user-selectable “watch faces” for the built-in clock. A source for iLounge has suggested that Apple may extend the smart watch concept further by adding low-power Bluetooth 4.0, enabling a nano to connect to an iOS device like an iPhone running iOS 6.

“The feature would enable a future iPod nano to display iMessages received by an iPhone, record voice memos that could be shared via the iPhone, and even initiate phone calls through its own headphones,” according to iLounge’s source.

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