By Aidan Malley

Published: 05:45 PM EST

Just a day after one of its Taiwan analysts predicted that Apple would produce an iPhone based on the iPod nano, JP Morgan's American headquarters has dampened expectations with a second report.

The financial institution appeared to distance itself on Tuesday from bolder claims made by Kevin Chang, who reckoned that a mid-priced iPhone was due to ship by the end of 2007. Senior analyst Bill Shope noted that Chang's sources have yet to be corroborated and would contradict Apple's historical business approach of waiting until a new device becomes truly necessary for the market.

"We believe a near-term launch would be unusual and highly risky. It took Apple over two years to launch its first low-end iPod (the iPod mini)," he explained. "Not all consumers want a combined phone and music player, so Apple is likely to keep the iPhone and iPod as distinct business segments for as long as this makes economic sense."

Shope also warned investors that basing estimates on a single patent was unlikely to prove fruitful, as many of the company's patents rarely translate directly to shipping products. The iPhone, by JP Morgan estimates, was more likely to keep its existing shape and add 3G wireless Internet at a similar price in early 2008.

Chang's claims of up to 40 million of these new nano-based iPhones would also have little to no effect on present-day analysis that forecasts 44.7 million flash iPods sold in 2008, Shope said. If the lower-cost model were to reach the largest 40 million figure it would most likely cannibalize the iPod nano, a consequence the Taiwan analyst endorsed despite the artificial limitations it would impose on Apple's sales.

"The current nano business is solid," said the American researcher, "so why risk it? We struggle to understand why Apple would abandon one of its most successful product lines with a carrier-centric low-end phone. For now, it seems aggressive."

In making these conclusions, Shope and JP Morgan reiterated that the extreme dependence on the iPhone's launch success for Apple's stock value was too volatile to justify the run-up witnessed on Tuesday, and chose to hold its Neutral rating on shares until it became clear that the iPhone was helping or hindering Apple's bottom line.