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I think

The next iTouch needs to have a camera, or it doesn't have a reason to exist! The question is whether it will be front facing, rear facing or both. My preference is for rear facing, since that allows photos and/or videos.

Speculation on my part is that price points will stay the same. $199 will probably get you 16 or 32 GB old hardware (3rd gen?). 4th gen will be the higher price points. Camera and CPU are likely upgrades. Storage, RAM and screen are also possible. If they up storage and RAM, it seems like they would need to update iPad as well to keep pace. Lots of possibilities. Let's hope Apple delivers.

I think it is going to make a rear facing camera and also a little mirror type of thing so you can see yourself if you take pics for yourself
 
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