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Jobs: We Made the iTouch as Cheap as Possible

Yesterday Apple surprised folks by leaving the iPod Touch out of the camera equation. While the company cheerily announced that it would be using the Nano to take on the likes of the Flip for the video-taking market, the iPod Touch received only speed and storage improvements.

So what's the deal? Surely it makes sense to add a camera to the bigger device because there's more space, right? And don't forget the iPod Touch has that nice, big display. Wouldn't people prefer to shoot video on the iPod Touch as opposed to the iPod Nano? Steve Jobs yesterday spoke to NYT and explained why the company decided to leave the camera out when it came to updating the Touch.

Jobs starts by saying that, back in the beginning, they didn't know how to market the iPod Touch. Apple couldn't decide if it was an iPhone without the phone, or a pocket computer. However, customers soon began praising the device's abilities when it came to gaming.

"What happened was, what customers told us was, they started to see it as a game machine. Because a lot of the games were free on the store. Customers started to tell us, "You don't know what you've got here - it's a great game machine, with the multitouch screen, the accelerometer, and so on."

Because of this, Apple decided that they'd use the Touch to focus on gaming (hence why yesterday's event featured so many game devs) as well as it being the cheapest way to get to the App Store.

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.

Do you think it was a mistake for Apple to add a camera to the Nano and not the Touch? Let us know in the comments below.

Check out the full interview with Steve on NYT.