iTouch and iPhone

I was thinking, when listening to some music on my iTouch (iPod Touch) about what was the point in creating a iTouch if it is practically the same product as the iPhone. The only difference (that I know of) is the phone part. An iTouch is like a hand held mini laptop, while a and iPhone is a mini laptop + a phone. Can you tell me what is your opinion on apple making the iPhone and/or iTouch?