We touched on it earlier this month after rumors were swirling that Apple was planning to release the 3rd generation iPod Touch with a camera. Sources over at Wired are confirming that the 3rd generation iPod Touch will feature a camera and microphone.

This is great news for anyone that hates the phone service on their iPhone but loves everything else. The new iPod Touch, if it does come with a camera and microphone, will be a game changer, possibly taking away some sales from the iPhone.

Apple usually holds an annual iPod refresh around September. This year they’ll be facing stiff competition from Microsoft. Microsoft is planning to launch they’re Microsoft Zune HD sometime in September as well.

(Via Wired)