A “well-connected source” tells Wired that the recent rumors of a camera and microphone being added to the iPod touch are “on the money,” also saying that Apple’s factories in China are already manufacturing this new model.

The current iPod touch already has support f ormicrophone input through the headphone jack and dock connector but that means that users who would like to take advantage of a microphone based application (such as Voice Memos) would have to carry an accessory along with them. An integrated microphone would bring the iPod touch further up to speed with the iPhone’s functionality. From this release on application developers would be able to assume that a user would always have a microphone available to them, whether they’re using an iPhone or an iPod touch.

I expect this new iPod touch to be announced and released in September with both an integrated microphone and a camera. Also, don’t be too surprised if the camera happens to be 5 megapixels.