Basically, it's a dock-capable shuffle.
The Apple media event on September 1 will herald the launch of a new 6th-generation iPod Nano. AppleInsider reports that the gadget's form factor will be "drastically reduced" but that it will still use the standard 30-pin dock connector. Leaked images of the new Nano show it having a more shuffle-like appearance.
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This new Nano may make use of a small touchscreen display, although its small size makes a different input method more likely. Perhaps a scroll wheel? Whatever the case, the presence of a 30-pin dock is a very good thing. This means that the Nano will be able to take advantage of the staggeringly wide variety of iPod peripherals.