I want to believe, but I don't think we will see new iPod Touch. Apple discontinued iPod Nano and iPod Shuffle last year. Current iPod Touch have A8 CPU and new iPhone (2018) will bring A12... I think it's clear that Apple have no interest to announce new iPod Touch.
iPod Touch cost $199 to $299. According to Google search results, production of one iPod cost Apple $43, so I predict that this potentially 7th gen iPod would cost also around $45. So Apple got something like $155 to $255 from every unit. But you have to add to their cost distribution as well as marketing and ads. There would more cost like R&D but it's hard to predict how much would it cost, cause some of the components are similar for various devices.
So basicly I would say that from every unit Apple can get ~$120 to $220. Next thing is crucial - how many people would buy iPod Touch with Wi-Fi only connection in 2018? It is age of streaming and cloud, non of this you can make without Wi-Fi in iPod Touch, you have to plan what music you want to put on your iPod like in 2012. I know there are people who want to use iPod Touch in car or during trip or sport activity, but think 95% of people prefer to spend more money for bigger storage on iPhone and connect it with car via Bluetooth or minijack (joking, not without a dongle) or buy Apple Watch with more functions for active live and potential of streaming music.
I would love to see new iPod Touch with 4,7" screen and even with A9 or A10 chip, but I think that profit is so small for Apple, and risk is too big (cause they don't know how many people would buy it). I would buy one for my son, he use 6th gen for games and movies when I drive a car, but as I said before 95% of people that need device like this would go for combination of iPhone + Apple Watch which is better for activity or 256/512 GB (If Apple would introduce such capacity) iPhone if they need it only for music. It's not the time for music device only.
The only way IMO for 7th gen iPod Touch is if they find a way to put A9/A10 chip (I assume they have a lot of these) in current form factor, without changing case, ram, board and battery + maybe slightly better camera. So if change would cost them almost nothing - then maybe. Otherwise I don't see it.
