Apple has announced its next major press event, taking place on Tuesday 9th September at 10am in San Francisco. As has become traditional, the company will announce its latest iPod models in time for the Fall and holiday seasons. With the sales success of the iPhone 3G still ringing, all eyes are on what the iPod touch 2G could bring.

An obvious and likely improvement is more capacity. Flash memory prices have dropped since Apple’s last refresh, and the iPod touch 2G is likely to coincide with the introduction of a new 64GB model. With that, it’s been suggested that the entry level iPod touch 2G, likely to be either an 8GB or - depending on what memory prices Apple can negotiate - a 16GB version, will take a price cut to $249. That would bring it more into line with the iPhone 3G, that starts at just $199 (with a two-year contract).
The second major rumor is GPS functionality. Apple included true hardware GPS - as opposed to software triangulation from cell towers - to the iPhone 3G, and many analysts expect that ability to spread to the iPod touch 2G. Apple has focused strongly on location-aware applications recently, and many of the titles in the AppStore (to which the iPod touch 2G will also have access to) use GPS to deliver nearby services to users.
Perhaps less likely, but still suspected by some, is the inclusion of a camera in the iPod touch 2G. This would be another carry-over from the iPhone and, if true, probably the same 2-megapixel resolution so as not to outdo the flagship smartphone.
Aesthetic tweaks to the iPod touch 2G casing are likely, with recently leaked dimension diagrams suggesting that the PMP will follow on from the iPhone 3G’s evolved design. At 111mm tall by 61.8mm wide and 8.4mm deep, the casing is slightly thicker - whether from a larger battery or added GPS is unknown - but the edges now taper with a greater curve to the rear panel, disguising the added girth.
Beyond that, the speculation gets more sketchy. Improvements to audio quality and maybe an altered DAC have been another suggestion. The improved iPod touch 2G will also share the stage with a new iPod nano 4G.
SlashGear will be Live Blogging the September 9th Apple announcement, so check out http://live.slashgear.com/ at 10am EST for the full details!