The iPod touch is Apple's dedicated music player, but it does more than just play music. You can think of it as an iPhone without cellular or a really small iPad. It does everything an iPhone or iPad does, including support apps and games, send and receive text messages (over wi-fi) and even make and receive phone calls (using Continuity). With the latest processor chip, it can handle graphics-heavy AR games. It comes in 23GB, 128GB, and 256GB storage options.
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