Also touched on briefly during Apple's Q1 conference call yesterday was the prospect of a low-end iPhone, and Chief Operating Officer Tim Cook was quick to dispel hopes of that (and of an iPhone nano?) as well (text via Macworld):

Tim: We're not going to build a low-end voice phone. Our objective is not to be unit share leader, it's to build the world's best phone.

Interestingly, however, Apple is still pondering what to do about unsubsidized markets (where, unlike AT&T, the carriers don't foot part of the phone cost, making it initially much more expensive for buyers):

Largest example is India. Sales less in non-subsidized markets, obviously. Huge market opportunities and will make adjustments in future to play in a stronger way.

So what does this mean? No iPhone nano or iPod with phone features bolted on, it seems. But how will Apple increase sales in those non-subsidized countries? a 4GB SKU? Or when the iPhone hits 32GB, will the 8GB become a special SKU for those markets? Maybe if we get an iPhone HD this summer, the 3G itself will become that SKU?

The again, Apple is famous for denying (even bashing) things until the moment they release them...

Our forums are weighing in, so head on over there and let us know what you think!