The latest rumors around the internet seem to speculate that Apple’s third generation iPod Touch faces the possibility of having its own autofocus camera better than the one found in the iPhone 3G S.

Mac Rumors and several other Apple blog sites have been circulating images of a black rubber casing named “iPod Nano 5” that has a hole cut out for a camera lens. While speculation in the past based on these accessories has been true for new iPhone models, many of the iPod Nano claims never saw the light of truth.

Nevertheless, Digitimes claimed three months ago that Apple had placed secured orders with OmniVision for 5MP CMOS image sensors “for another Apple product expected to be launched later in the year.” The order size is supposedly large enough that there is room for even the lower-end iPod lines to receive cameras. One source close to TechCrunch cited, “Everything but the Shuffle may have a camera in it soon.”

We will add our own spin to the speculation by adding that the 3rd generation iPod Touch may also feature the same 3-axis digital compass chip found in the iPhone 3G S. AKM Semiconductor released the mixed-signal chip, named AK8970N, back in November 2005 for portable GPS applications. However, for this to be possible the device must also carry a GPS receiver. Taking a look back at the bill-of-materials list for the iPhone 3G S, we can see that the Infineon GPS Receiver comes out to be a mere $2.25 in the large scale of device manufacturing costs.

With the possible inclusion of a CMOS image sensor and the additional costs that it brings, anything may be possible as far as new hardware features go for the upcoming iPod lineup. With a track history for releasing new iPod Touch models every September with slightly improved hardware over its newest iPhone, Apple may just be on to something once again.