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Update July 1: Apple is now launching the device internationallyUpdate 8:30 a.m. ET: Apple officially launched the new 16GB device and cut prices across the entire line, confirming earlier rumors. Details here.

Rumor has it that Apple will launch a new iPod touch model next week — a 16GB $200 device with back- and front-facing cameras.

According to MacRumors and French Apple news site iGeneration, the new device may replace Apple’s current cheapest iPod touch, a $230 device with a single, FaceTime-branded camera. As the line currently stands, Apple’s cheapest iPod touch device does not compare to the company’s $300+ offerings, which tout a 5MP “iSight” camera and more storage, among other features.

This rumored upgrade falls in line with Apple’s recent commitment to price-sensitive markets, as 9to5Mac notes. The lower price could help Apple further solidify itself against competing, low-end MP3 players. It’s noteworthy, however, that Apple has seen declining iPod sales for quite a while now.

Via MacRumors.

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