Q. You put a camcorder on the iPod Nano. Why not on the iPod Touch?
A. 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. Because a lot of the games were free on the store. Customers started to tell us, “You don’t know what you’ve got here — it’s a great game machine, with the multitouch screen, the accelerometer, and so on.”

Q. How come the Nano can now record video, but can’t take stills?
A. The sensors for doing video are fairly thin. The sensors for doing a still camera, at much higher pixel resolution — and we’d really like to have autofocus — they are just way too thick to ever fit inside the Nano.

You can view the full interview HERE.