Apple strategy has changed, but only this year. Try remember touch vs iPhone differentiation over the last generations. Let's compare touch 3rd gen vs iPhone 3gs. Aside from the obvious lack of camera and gsm modules, there was nothing inferior in iPod touch to the iPhone 3GS. Same screen, same amount of ram, same processor, same operating speed. It was even reported touch was a tad snappier and more responsive than the iPhone! Now back to iPod 4gen vs iPhone 4 seems like the situation changed entirely. Starting today, as we all know the full specs of the new touch, it is no longer "an iPhone without a phone", it's much more inferior than every iPod touch generation was ever before. Practically every single part is worse than iPhones (screen, ram, camera). In my opinion it is the begining of the new Apple's strategy in iOS product differentiation. Question is why Apple changed it's strategy? Maybe in the past years too many people opted for an iPod touch as it was a nice "an almost iPhone" device with the lack of camera/GSM, so this year Apple made a more obvious choice for them, releasing an iPod device far more inferior than the iPhone. I fear that from now on each new iPod touch generation is going to be more and more worse than new iPhones.