Since the iPod's introduction, a few media players with integrated cameras have entered (and failed) in the marketplace: the Archos camcorder and Olympus m:Robe. While the camcorder-enabled iPod nano will surely sell orders of magnitude more than those products did, the video camera feels no less tacked on. Quite to the contrary when it comes to portable gaming, Nintendo, the longstanding market share leader in handheld games, added a camera to its DSi, and a rear-facing one at that.
To be fair, an iPod nano with embedded camcorder does enable Apple to market a Flip competitor that is significantly smaller than the Flip mino, with a screen size closer to even bulkier competitors such as the Kodak Zi8 -- although it lacks HD video capture. The candybar camcorder market has been small by iPod standards, but it continues to attract more competitors -- Samsung, for example, recently launched the HMX-U10.
The Jobs interview does offer a potential clue to what was perhaps a more pressing concern in integrating a camera into the touch. Explaining why the nano was limited to recording video and not stills, Jobs mentioned that adding both would have made the nano a significantly thicker device; Apple has consistently pointed with pride at the thinness of its mobile and portable devices.
Particularly with the thin Zune HD (and its OLED screen) entering the fray, Apple is likely loathe to bulk up the incredibly slim iPod touch. I suspect that the protests of users will eventually change Apple's mind; even FM radio has made it into the iPod after all this time. But for the next year, at least, iPod touch users may be condemned to carry a separate digital camera and endure burdens such as optical zoom, image stabilization, and vastly better image quality.
Ross Rubin is director of industry analysis for consumer technology at market research and analysis firm The NPD Group. Views expressed in Switched On are his own.