[doogald]

Steve Jobs on why there is no camera on the Touch (from NYTimes):

“Originally, we weren’t exactly sure how to market the Touch. Was it an iPhone without the phone? Was it a pocket computer? What happened was, what customers told us was, they started to see it as a game machine,” he said. “We started to market it that way, and it just took off. And now what we really see is it’s the lowest-cost way to the App Store, and that’s the big draw. So what we were focused on is just reducing the price to $199. We don’t need to add new stuff. We need to get the price down where everyone can afford it.”

So, I think that I was right; they were more concerned this year with getting the Touch at the right price/storage levels than adding features like a camera or a microphone, and most of their consumers seem to care more about simple gaming apps than they do about features. And keeping the same 8GB model meant that there would be a feature difference between the 8 GB and the 32 and 64, maybe something that they did not want.

Also:

I also asked him why the Nano can record video, but can’t snap still photos. That reason, he said, is technical: the sensors you need to record video are extremely thin these days—thin enough to fit into the wafer-thin Nano. But the ones with enough resolution for stills, especially with autofocus (like the sensor in the iPhone), are much too thick to cram into a player that’s only .02 inches thick.

So they'd rather have a thin, video Nano than a thicker one that can also shoot still photos. Interesting. (Still, my 4G Nano makes a flash Zune look like a thick slab by comparison, so he's probably right about keeping it as thin as the 4G.)