New iPod Touch- Much Thinner and with Retina and Cameras

The new iPod Touch has forward and rear facing camera, options of face time With front camera. The new iOS 4.1 will be available on the iPod Touch, and HD video recording. 3-axis Gyro. With all of this on the new iPod Touch, what is the point of the iPhone. The device will be powered by Apple A4 chip. Prices are $229 for a 8GB, $299 gets you a 32GB and $399 gets you 64GB.