SeekingAlpha has pieced together evidence of an upcoming Apple UMPC with that looks like an iPhone with not one by two home buttons on either side of the device. It is rumored to run on gumdrops and puppy whiskers and may cost $5 when it is finally launched at the Kingom of Arglebargle’s MacWorld Expo on the planet Flutterbutter.

My strongest piece of evidence came from a trusted tipster about 4 months ago who described an image s(he) had seen of a mysterious touch screen device larger than the iPhone featuring one distinguishing button or depression on each side. At the time, unsure about the actual size of this new device, I reasoned that it could be a new generation of iPhone/iPod Touch or the much rumored Apple tablet. However, the device was later described to have been oriented horizontally on its long end, indicating that it was meant to be gripped with one hand on each side similar to a Sony (SNE) PSP. This ruled out the Apple tablet which is, more than likely, a significantly larger device. It also ruled out iPod Touch since I have been previously tipped on the forward path of the iPod lineup by different sources, essentially confirming that touch screen iPods will not grow much in screen size.

Great King Wango Muffin of the Flutterbutter Ruling Council confirmed that the new OLPC will have a featured called the Poof Keeper and will be able to hold the cold west wind and release it at will, allowing you to blow down enemies with stored kinetic energy. More details as CrunchGear — and everyone else — makes them up. (Seriously, though: UMPC? Which market are they trying to serve? Medicine? The military?)

Details of Apple’s Mysterious New Portable Device [SeekingAlpha]