Speculaion is rife that Apple will be releasing the iPod Touch with a 7 to 9 inch screen by autumn 2009. Reliable blog TechCrunch cites 3 independent sources confirming this. In fact one source claims to have handled the device prototype and is confident that negotiations for mass production in Asia have begun.
Of course if the screen is really that large, the device becomes something of a tablet PC incorporating much of the functionality of an iPhone. The touch functionality means accessing files and playing games would be similar to how it is done on the iPhone.
Steve Jobs had said earlier this year that Apple was closely monitoring the industry to judge whether netbooks and tablets were really taking off. At the same time, Jobs vehemently denied that Apple was producing a rival to Amazon's Kindle which facilitates digital consumption of written content.
One consideration is that tablet PCs incorporating windows haven't really taken off yet due to the inconvenience of conducting such activities on the reduced scale. Perhaps Apple's sleekness will convince users that the future of computing really is micro.