Very very far fetched rumor. Apple has been pushing the gaming aspect of the ipod touch so you would think any new tablet would be able to also play those apple store games and use those apps. That means it HAS to be touchscreen and it has to be LCD to perform quick changes on a high res screen.
The money Apple could make from a specialised e-reader friendly device pales compared to the money in movies, games, music which requires a decent res LCD screen.
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