For years people without AT&T have wanted an iPhone without the phone. Some where happy when the iPod touch was released, but it still didn't measure up to other people's expectations. Wired is reporting that their sources have confirmed a new iPod touch is in the works (possibly already in the manufacturing phase) that includes both a camera and microphone.

The article also mentions that these iPod touches should be available for purchase in "two to three months," which would be around the time of the normal iPod refresh schedule in early fall. If these rumors are true, then we would like to see what happens to iPhone sales and iPod touch ownership.