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Sep 28, 2016 12:43 PM in response to e.m.m.a_by lllaass,All the iOS 10 compatible devices have at least 1GB of memory.
The 5G iPod only has 512MB of memory
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Sep 28, 2016 7:35 PM in response to e.m.m.a_by MichelPM,In addition, the iPod Touch 5th gen has the same 4 &5 year old technology as the iPad 2, 3 & 1st gen iPad Mini.
They all share the same slower 1.0 Ghz CPU, which in the iPod Touch 5th gen, has been clocked DOWN to 800 Mhz, which is even slower than any of the iPad models of the same era.
All of the iDevices that are not on the compatibilty list for iOS 10, Apple has deemed to have insufficient speed and power as well as other insufficient hardware architectures (it's not just memory related as both the iPad 3 and 4 both have 1GB of RAM) that make the iPod Touch 5th gen less than stellar to be able to run even the basic, barebones features of iOS 10.
FYI,
Just because your iPod Touch 5th gen is no longer able to upgrade to the latest iOS doesn't mean your iPod Touch is suddenly useless.
Your 5th gen iPod Touch will work as it always has and the apps you have installed on it will continue to update and receive some level of app updates relevent to your current iOS.
So, I put this rationale to you.
You have had four years of iOS upgrades and updates.
Your iPod Touch 5th gen will still do everything it does now and you will, get, at least, another full year, perhaps two, if you decide to you want to wait longer to get a new or newer iPod Touch model.
Your iPod Touch 5 is NOT suddenly obsolete.
Good Luck to you!