The iPod Touch is getting closer to the iPhone

Macrumors has posted some theories that the iPod Touch may sooner be just a little bit more like the iPhone.  Some case designs lead to the possibility that future generations may include a camera.  Cameras may also be included in future versions of the iPod as well.

To quote Borat, this would be "very nice".  There would be less reason to be stuck with a two year AT&T contract since the iPod Touch would have even more capabilities of the iPhone.

If this ended up being true and such a device were released, sales of low-end digital cameras would significantly plummet.  Why buy one of those when you can get an all-in-one device?  Since I doubt the camera in any form of iPod would be particularly high-end, SLRs would have nothing to fear.  For now.

To speculate further, what if they do with the iPod Touch as they did with the iPhone and offer different capabilities at different price points?  That would be so like Apple.  HD Video recording maybe for a price?

Frankly, if AT&T wanted to add another revenue source, they could offer data-only plans for the iPod Touch (and just keep off microphone capabilities to prevent iPhone competition).

Of course, all these are just rumors.  Only time will tell.