I think some people have the wrong idea about the nano's video camera. It's not meant to be a high tech video camera. If you want high quality video, you get a video camera. And if you look at apple's ipod market share, it's still stupidly high. But not as high as it once was, they lost a few points there.
So I think Apple asked themselves why are people buying other mp3 players and why did we lose those few points market share. I think the camera on the ipod is just an extra. As in if for the same price I can get a non apple music player or I can get an ipod with a camera. I think I'll get the one with the camera. I think it is there primarily for the purpose to sway people away from the non apple products.
Seriously the nano's camera at it's currently quality is gimmicky at best. But it's something to keep the interest on the ipods. As I think ipods once were the new hot in thing. Now they are just a house hold name evetyone knows. And cause of that a little harder to invoke interest in them. But the camera might just do it.
And also it's well known Nano's are the best selling ipods. And I think Apple want to keep the sales of them high.
*****************
And to the above post, I thought it was a really good event. You can't expect the world from an ipod focused event. So if you realise that you can really enjoy it, well at least enjoy the news that comes from it.
And for me one of the highlights was the talk that Apple is researching price points and trying to understand what price point (for each product) generates the highest sales and profits. And they realise super high and super low prices sometimes aren't the best thing. But a nice mid point. And cause Apple sell premium high end products they need their pricing just right. As poor and rich people want their products alike. And both are sales for apple.