Didn't Apple have time to make a HDD based iPod Touch ?
Flash vs. HDD
Apple has been making extensive use of NAND flash memory in the iPod line, taking advantage of the 50-60% annual reductions in pricing to maintain or decrease its costs, while doubling its products' storage capacity every year and holding its pricing largely steady.
However, with the HDD-based classic, Apple also may want to address users that make extensive use of storage.
"Apple's continuation of the iPod model without adding new features suggests a stopgap measure necessitated by lack of time to develop an HDD-based touch iPod," said Chris Crotty, senior analyst, consumer electronics, for iSuppli. "Apple may not have had time to develop an HDD-based touch-screen iPod before the 2007 holiday season."