They’ve already had to cut the current iPod prices by $50. Dressing it up in a new shell and making it shorter will not be enough to keep their price points. Even if the base iPod goes to say 40 or 60GB, it will not cause many waves, nor will it allow them to bump back up to $299 and $349/$399 IMO.
I think the fullscreen iPod is BY FAR the most exciting thing Apple could do right now, and would re-invigorate the full-sized iPod line. There’s been more focus on movies by Apple, so it’s also a natural progression. The touchscreen UI on the iPhone is oh-so-sexy, and the iPod could use that injection of sex appeal (being that it’s been outsold for years by Mini/Nano.) I only hope they can hit the $299 price point for a 30GB model (without camera or wifi). With the onscreen keyboard you could even add and edit playlists (not just on-the-go).
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