Not so, said Apple CEO Steve Jobs, who attempted to clarify his company's strategy in a with New York Times' tech columnist David Pogue. Jobs said that Apple's customers see the iPod touch as a "game machine" rather than as a phone-less iPhone or pocket computer. For that reason, Apple felt it was more important to cut the price of the entry-level 8GB touch to $199 (down from $229), which would boost sales and draw more people to the App Store. "We don't need to add new stuff," Jobs said.
I credit Jobs for coming up with a creative answer, but his explanation doesn't wash. How would the addition of a video camera impact Apple's ability to market the touch as a portable game machine? Consumers would likely see the camera as a positive, not a negative, even if they had no great need for it. And gamers would be happy that, in addition to the touch's myriad other functions, it shoots video too.
The claim that the iPod touch needs to hit the $199 price point? That's just as fishy. Remember that the touch became a at $229, and a camera-equipped model would give Apple a solid justification to maintaining the original price. Furthermore, since when did Apple focus on price rather than on overall value? Jobs' we-had-to-hit-$199 excuse seems to contradict the company's premium-brand philosophy.