http://www.marketwatch.com/News/Story/Story.aspx?guid=%7bA4577144-6ABE-4A10-BBFB-C12652748B3F%7d&siteid=yhoo&dist=yhoo

In a research note, Wu said there are indications that Apple could release a small, "subnotebook" computer that uses NAND flash for its main storage instead of a traditional hard-disk drive.

This is one of the more persistent rumors. Most of the Aplle rumor pages are quoting each others, but it all seems to stem from macosrumors.com

They call it Macbook Nano. It is rumored to have 12" HD-resolution 16:10 screen and no optical drive, and FW and USB2 + WiFI. The more far out rumors says that is is Flash-based meaning no harddisk either. 64 Gig of flash should mean that a FCP Express could run.

But we'll see

Apple are definitely coming out with a small flash based portable in the form of the iphone. It would be interesting if they fill the gap between that and a Macbook.

Is there a market in that gap?

If this is true than it looks like Apple is trying to copy Sony.

VAIO® VGN-UX390N Micro PC
http://www.sonystyle.com/is-bin/INTERSHOP.enfinity/eCS/Store/en/-/USD/SY_DisplayProductInformation-Start?ProductSKU=VGNUX390N&Dept=computers&CategoryName=cpu_VAIONotebookComputers_UX_Series
4.5” 1024x600 LCD screen
1.33 gigahertz processor
1 gig of RAM
**32 gig NAND memory**
$2,499.99

This rumor has legs....

http://money.cnn.com/2007/03/08/technology/apple.reut/index.htm?source=yahoo_quote

Wu, who was among the first analysts to forecast the unveiling of Apple's iPhone music player/phone earlier this year, cited unnamed industry sources as the basis for his report.

"The time is right for the flash makers to make a move" as flash memory prices decline, Wu said by telephone. "Apple, from what we understand, is pretty much ready. The ball is in the flash vendors' court."

It's a logical step. Eventually, everything will be non-moving and flash based. The problem is just when will it be cheap, fast and available enough to use it in mass quantities?

I really like the thought of this product further driving down the cost of HDDs especially as we move to HiDef.