The iPod touch has only 256MB for RAM and has a single core Apple A4 Processor, While the iPhone 4 does share the same chip, it has more RAM (512MB) features like Parallax Wallpapers, Dynamic Wallpapers, Animated weather, Dynamic clock app, Translucency, and not to mention all the camera features and improvements cannot be on only 256MB RAM. The newer iPod touch features a dual core A5 chip with (512MB) RAM, This is also a reason the older iPod touch didn't get Siri.
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