The device will apparently ditch the small, watch-sized form factor in favor of a more oblong structure, which is said to be more in the image of the iPod touch. Although, to me, it looks a little more like an old-school iPod nano than an iPod touch, it could also feature a home button, which would certainly drag it closer to the newer devices to have been released by the Cupertino outfit.
Despite the home button, the minute screen will probably mean it won’t run the usual iOS apps, although there could certainly be scope for a segment of the famous App Store to be dedicated to the new device. This notion is corroborated by Macotakara, which states Apple will be bringing a "dedicated new iTunes service" of some description for the device, but at this point in time, there are no further details as to what this means.
New iPod Nano on the spot: Longer form factor and home button
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