Aside from being a lot cheaper, what's the issue with a company offering two similar products?
After all, why do Ford have the Ka and the Mondeo, they both just carry 5 people from one place to another. And why watch TV or films, there are only 5 different story-lines in the world anyway.
Actually, the Ka can only take four people in a ryan air type squish, it's never had five seats.
The I pod touch is an evolution of the original Ipod, the idea being that you have more control options using the touch screen and you can put games on it, it was also a bit of a test bed for the iphone that came soon after.
there is a price difference of a couple of hundred pounds (or used to be) for having, basically an ipod touch with a built in smartphone
I had an Ipod nano (one of the small ones) which my wife has kidnapped since I never use it anymore as my iphone works as an ipod.