Yes, that is the rumor--there will be an iPhone eXtreme in January of 2008. HOWEVER, this is ANYthing but confirmed. I simply stumbled across a guy a who name drops like mad in his Twitter posts and in one of said posts from a couple months back, he drops:

PLEASE KEEP IN MIND that this rumor goes almost COMPLETELY unsourced beyond this one dude on Twitter. The thing is, something like an iPhone eXtreme and NOT something like an iPhone Nano, makes sense.

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