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Wired is reporting that they have strong rumors that the upcoming next gen iPod Touch, expected in September, will be sporting not only a camera, but a mic.

A well-connected source tells us those rumors are on the money, and that Apple’s factories in China are already manufacturing iPod Touch models with integrated cameras and microphones. An Apple spokesman declined to comment when reached by phone.

If iPod Touches with cameras and microphones go on sale “in two to three months,” as our source expects them to (and which corresponds with our expected timeframe), they will transform the entertainment-oriented iPod Touch line into a voice communications tool wherever WiFi is available.

This strikes me as somewhat foolish on Apple’s part. In the past they have always seemed to keep the iPod Touch a bit hamstrung so as to not cut into sales of the far more profitable iPhone. With the growth of Skype and other VoIP services (and their ability to contact normal phones for small fees) an iPod Touch with a mic would essentially become a cheap iPhone able to make free phone calls anywhere there was a solid WiFi connection. AT&T can’t be too happy about that possibility and it is not like Apple to cut into their own profit margin that way.

Still, the concept IS intriguing, and if true gives me even more reason to upgrade my First Generation  iPod Touch this fall.

Zealot (468 Posts) - Website | Twitter | Facebook

By day a department manager and writer for a major network device vendor...by night Zealot stalks the mean magnetic streets, striking fear into the hearts of bandwidth abusers and theme park mascots. Zealot has been involved with mobile devices for more than a decade now, starting off with dumb phones, moving to PDAs and then to smartphones, notebooks and netbooks with the odd PMP thrown in. Most of his mobile time currently is spent on a Treo Pro, Zune HD, Thinkpad T61, Gigabyte M912M or a Hackintoshed Compaq Mini 704. He proudly groks the Geek community and considers himself a Neo Maxi Zune Dweebie (thanks Will Wheaton!).