We’ve heard rumors in the past that Apple had an iPhone prototype with a physical keyboard floating around its Cupertino labs. But the speculation has never been confirmed or denied. Until now.

Tony Fadell, a long-time Apple employee turned Nest founder, was on The Verge’s tech talk show On The Verge last night. And the ex-Senior Vice President dropped some insider information about Apple’s popular handset…

The Verge reports:

“namely, that a hardware keyboard was seriously considered within Apple before the iconic touchscreen-only design was given the green light. He said there were three different versions: an “iPod + Phone,” a different iteration that was called the “iPhone,” and finally, the device that was ultimately introduced back in January of 2007.”

Fadell started working for Apple back in February of 2001 as a contracted designer for the original iPod. He went on to oversee 18 iterations of the popular MP3 player, as well as three versions of the iPhone, before leaving the company in late 2008.

Obviously, going with an all-touchscreen device turned out to be a smart move on Apple’s part. Not only are most smartphones touchscreen-only nowadays, but the device has become the company’s best selling product — by a wide margin.

Nevertheless, it’d still be interesting to see what the other two handsets looked like that Apple was working on alongside the iPhone. What would an Apple-designed smartphone with a physical keyboard look like? What about this iPod + Phone device?

Thoughts?