I've been dying for an iPhone since they arrived, but at AT&T's outrageous rates I cannot afford three (there's no way I could get myself one, and NOT my wife and teenage daughter!) So I've been shopping for an "iPhone without the phone", which is essentially what the Touch is.

I have been following the hype and rumors of this new release for months now, and the product they chose to release is disappointing and confusing.

As everyone has commented, it is baffling why Apple elected to add FM Radio and a Video Camera to the miniscule iPod Nano, and omit those features from the Touch, which is their Swiss Army Knife of a product (iPod, 'Pocket Computer', gaming device, e-book reader, etc.) Rumors of "technical difficulties with the camera at the last minute" are ridiculous, as the iPhone 3G and 3GS have cameras which work perfectly. The only conclusion is that it was a deliberate marketing decision by Apple so as not to cannibalize iPhone sales.

The added bump in performance is welcome, as is OpenGL graphic support, but otherwise it's an evolutionary, not a revolutionary, release.

I don't plan to carry earphones with me at all times, so an improved speaker and built-in mic would have been nice. The addition of Voice Control and Voice Memo features WITHOUT installing a mic is utterly useless to me. I'm not going to whip this out of my pocket and fumble with plugging in their headphones just to tell it "remember to buy milk", or "lookup John Appleseed", and the bundled Apple headphones are notoriously lackluster to begin with. Now I have to shop for 3rd party headphones with a mic and iPod control buttons??

Apple is also arrogant to compare this to dedicated gaming devices just because you can tap the screen or tilt it, and a library of 20,000+ available "game" titles does not impress me when 80% of them are along the lines of "iFart", or "Shake The Baby".

I'll still buy one once they reach retail stores, because of the portable video functions, and mobile browser, but I do not think this would be a "must have" upgrade for existing Touch owners.

I'm certain to be selling this as soon as the 3GS (or better) is available on another cellular carrier, as what I am really looking for is to carry ONE device which is a; phone, music & video player, casual game device, camera, contact / schedule / e-mail manager, and Internet browser, independent of WiFi hotspots.

*** EDIT ***

Okay, after re-reading this I realize that this review sounds negative. Let me be clear: this is a sleek and amazing product, in its third year of refinement. The new iTunes 9.0 offers features which, when paired with a Touch or iPhone, are incredibly useful. I would have nothing but the highest praise for the 3rd Gen Touch were it not for the existence of the iPhone 3GS, which PROVES what can be done in an all-in-one device. I was awaiting the inclusion of a camera (still or video), and am disappointed, but don't think for a moment that I'm not dying to get my eager little hands on this device! (This is my first Touch, though I have MANY, MANY clients for whom I've setup iPhones and 2nd Gen Touches. I am VERY familiar with the history, evolution, and capabilities of this product.)
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