According to some rumors, Apple plans to release a mini version of the iPhone called iPhone nano. The source says should be available by Christmas at a price of $300 sans contract.
As there are still 5 months to go before Christmas, I wouldn't get too excited in your place. And by the way, no one knows whether it will be a shrinked 3G iPhone...Rather we should wait.
[Continue reading Rumor: iPhone nano to be Launched by Christmas]