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One of our sources in Asia say that Apple has placed an order for a massive number of camera modules of the type that they include in the iPhone. These are inexpensive cameras, in the $10 range. And the size of the order, our source says, means they can only be used for one thing - the iPods. Update: Macrumors features two images of cases that are supposed to be designed for the upcoming iPod Touch and iPod Nano, and suggest that the next generation of said devices will indeed include a camera.

What an exciting possibility! Looking forward to hearing more about this.