CNET reports that an updated, FaceTime-enabled iPod Touch is in the works and will be released this fall. The rumor comes from a buyer for a major U.K. retailer.
The iPod Touch is said to also be loaded with other features found in the iPhone 4, such as the 5-megapix camera with flash, HD recording and a gyroscope.
However, a spokeswoman for the retailer said that the buyer did make the remarks, but was "speculating" about the features the device would carry. She said that Apple has not spoken directly with the buyer.
In usual fashion, Apple has not commented on the rumors.