The fourth generation iPod Touch should be launched in the second week of September as it has always been the case until now and recent suggestions from an event organised by UK retailer John Lewis point to an evolution in the media player's specifications.
The device, which was first released as a bastard brother to the iPhone, is now the third member of a family that also includes the iPad (some now say that the iPad is closer to the iPod Touch than the iPhone ever was).
Based on what we now know of the iPhone 4 and various industry sources, one can draw a pretty conclusive picture of the next generation iPod Touch.
It will come with an ARM-based Cortex A4 possibly underclocked to 600MHz as it is currently the case. One can also expect to see a 5-megapixel camera with flash, a gyroscope, 802.11n Wi-Fi to support Facetime, an array of sensors and possibly a front facing camera, all powered by iOS4 and enclosed in the same chassis as the iPhone 4.
Using common hardware platform across the iPad, the iPod Touch, the iPhone and possibly the Apple TV means that Apple can use massive economies of scale to increase profitability.
We don't think that Apple will introduce the Retina display on the iPod Touch because of supply and pricing concerns; ditto for an improbable 128GB iPod Touch media player.