Apple has dropped the iPod touch to its lowest price ever and thrown in a rear-facing iSight camera for good measure.

The new 16GB model with a five-megapixel camera made a quiet debut on the Apple Store on Thursday for the new low price of £159 or $199 in the United States. That's £40 and $30 off respectively.

The four-inch device replaces the non-camera iPod touch 16GB model. It keeps the Retina Display, is available in six colours (black, silver, pink, yellow, blue and red) and comes with a wrist strap.

The new iPod also packs the FaceTime HD camera, an Apple A5 processor. It ships with iOS 7 and a set of the Apple EarPod headphones.

Breathe new life

Meanwhile Apple has also significantly reduced the cost of the higher storage models in the range, which are all available in the US and the UK from today (the UK page isn't yet showing the 16GB update).

The 32GB model is now £199/$249, down from £249/$299. The 64GB iPod touch is £249/$299 reduced from £329/$399.

The price cuts come as sales of iPod models continue to fall year on year. The company sold just 2.7 million iPods in the last quarter, down from 5.6 million from the same period in 2013.

Perhaps these considerable price cuts and added value for the 16GB model will breathe new life into the gadget that changed music forever.