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Jobs. Photo: Apple Inc.

When David Pogue, the
New York Times’
chief technology columnist, sat down with Steve Jobs after his “It’s only rock and roll” keynote Wednesday, Pogue’s first question was the one, as he put it, the “blogosphere’s been buzzing about”: Why did Apple (AAPL) put a video camera on the iPod nano but not — as widely expected — on the iPod touch?

Jobs reiterated what Phil Schiller, his marketing vice president, had said earlier on stage: that Apple was pitching the iPod touch as a game machine — the “funnest iPod ever.” Adding a camera would have made that game machine less affordable.

In Jobs’ words:

“Originally, we weren’t exactly sure how to market the Touch. Was it an iPhone without the phone? Was it a pocket computer? What happened was, what customers told us was, they started to see it as a game machine. 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.” (link)

But according to AppleInsider‘s Kasper Jade, citing unnamed sources familiar with Apple’s decision making process, that’s simple not true.  “While AppleInsider appreciates the company co-founder’s play at damage control,” writes Jade, “it’s a tough sell.”

“Like the nano,” writes Jade, “people familiar with the matter maintain that initial plans for the new iPod touch called for a camera akin to the iPhone’s. Manufacturing tooling was prepped and specifications issued some time ago.”

Jade notes that an extensive analysis of the cost of adding a camera to the touch would have been done months — if not years — in advance and submitted for approval to roughly two dozen members of Apple’s top brass.

“According to those familiar with situation,” Jade reports, “management gave the green light to equip the latest-gen touches with cams last year. But problems, as AppleInsider reported earlier in the week, began to crop up with the third party camera sensors Apple took receipt of earlier this year.

“After several passes through quality assurance were met with less than stellar results in the time leading up to Wednesday’s event, an executive decision was made a month ago to pull the cameras from the touches altogether, others familiar with the situation say.” (link)

In other words, it was a bad part, not cost or marketing considerations, that kept the camera off the iPod touches introduced this week.

According to Jade, Apple is still committed to equipping the funnest iPod with a camera, and new devices with the added capability could arrive unexpectedly at any time.