When Apple released the last-generation iPod Touch it only came in 32GB and 64GB models with a 5-megapixel rear camera. Now Apple has released a new 16GB model that ditches the rear-facing camera and only comes in one color: silver. It is available for $229, whereas the 32GB and 64GB editions sell for $299 and $399, respectively.
The cheaper iPod is evidently an attempt to appeal to a new market segment. By simplifying the design and omitting the rear camera, Apple has saved on its construction costs, which will improve profit margins while simultaneously bringing in new iTunes customers. iPod revenues have been falling for quite some time--this new device is perhaps a simple way to bump the numbers up slightly.
The rumor is that Apple will release a cheaper iPhone later in 2013, alongside a new flagship device. Speaking at the D11 event this week, Tim Cook spoke carefully, not ruling out such a move. Apple is said to have chosen Pegatron, rather than its usual partner Foxconn, to make the cheap phone, which will likely use the same cost-saving tricks as the new iPod Touch does to achieve a lower price.