There are few leaks around and it is hard to say whether there is any truth to the rumours, but it would be quite interesting to see a proper smart camera with Android on top.

Mind you, we are not talking about some gimmicky implementation of Android on a dirt cheap camera. The device is said to be loosely based on the Samsung Galaxy S III and it should ship with Android 4.0. On the actual camera side of things, rumours point to a 16-megapixel sensor, 10x optical zoom, all rolled into a package 1.5 to 2 times thicker than the S III.

Sounds like a wet dream for any photo freak out there, but it won’t replace your phone. The device should appear in two flavours, WiFi only and 3G, no phone functionality.

However, could the rumours possibly be true? Well, from a technical standpoint, it is quite possible to create some sort of hybrid device, with the S III or Samsung’s new Galaxy Player providing the essential DNA. Coming up with a 20mm thick device would also be possible, but such a device would come with a pretty high price tag, like Nikon’s Android camera, priced at $375.

So basically consumers would end up getting $100-$150 worth of lenses and sensors, but paying a hefty premium for some smart functionality. However, smart cameras could revive the fledgling compact camera market and smart cameras could be the next big thing, provided vendors prove able to offer them at reasonable prices.

More here.