Picture this: An Apple 10-inch touchscreen netbook. And hold that image for at least a little longer.

Rumors have swirled this week that Apple could announce a touchscreen PC, but it instead unveiled early on Wednesday a revamped iPod shuffle. Here are the details from the press release, headlined “Apple Announces Incredible New iPod Shuffle”…

The third generation iPod shuffle is significantly smaller than a AA battery, holds up to 1,000 songs and is easier to use with all of the controls conveniently located on the earphone cord. With the press of a button, you can play, pause, adjust volume, switch playlists and hear the name of the song and artist. iPod shuffle features a gorgeous new aluminum design with a built-in stainless steel clip that makes it ultra-wearable… The third generation 4GB iPod shuffle is now shipping and comes in silver or black for a suggested price of $79

Of course, this doesn’t mean that Apple isn’t developing a touchscreen netbook. Reuters and others have quoted sources saying Taiwan’s touchscreen specialist Wintek has received orders for the screens that are  are roughly the same size as those used in mini PCs.

And here’s what the Wall Street Journal reported:

Some people familiar with the matter say the device is a netbook, an inexpensive, shrunken notebook computer. Netbooks have been a growth segment for the PC market over the last year.