[copperx]

Is a celular radio really $400 or so? Or why is there such a different pricing scheme?

[zapzupnz]

The iPod touches also have lower-quality displays, lower-capacity batteries, base units have less storage capacity, usually have older or slightly underpowered A chips, and lower-quality materials leading to a slightly inferior build quality compared to iPhone.

(Also, iPod touch hasn't been updated for three years)

[copperx]

That is true today, but when back when the iPhone was released they were almost identical, sans the cellular radio, speaker, and microphone.