Why is the Touch more expensive than the phone?

The iPhone which does MORE than the iPod Touch is $100 cheaper for the 32GB model! What the heck?!?
iPhone 3G S 32GB $299
iPod Touch 32GB $399

F Shippey wrote:
The actual price is reflected in the 'No-commitment pricing': $599 (16GB) and $699 (32GB)
To get the lower prices you must sign a 2 year contract and a portion of each month's payment goes to paying off the difference in price.
If this 'no-commitment price' is true, then how come I don't see it listed in their online store?

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deggie wrote:
That is not true, there is nothing illegal about Apple selling the iPad through a web of authorized resellers and specifying a maximum price that can be charged.
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Why is the Touch more expensive than the phone?

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