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).
There will be tactile controls for volume and play/skip in one form or the other. It will probably have volume buttons just like the iPhone, and probably earbuds with ‘play/pause’ and ’skip’ button. They can also cut the price of the radio remote, which people forget is available for the current 5G ipods.
Maybe if they cut out the radio, they can reduce this thing to $20. The shuffle control set is the easiest to use without looking. I actually use my 1G Shuffle more than I use my 5G iPod (if I didn’t own a Shuffle I’d go ahead and buy the radio remote.)
With these additions, a touchscreen iPod would be easier to use without looking IMO than a clickwheel iPod. The clickwheel iPod is somewhat distracting for me to use in the car because I have to be careful not to accidentally tweak the volume.
Then next year, after the iPhone gets 3G and other improvements, they can add wifi, Safari, chat, YouTube, etc. to the next iPod. (iPhone Safari absolutely kicks ass over all other mobile browsers.) Heck they can even add Skype perhaps, since it’s not a phone and is not subject to limitations by ATT.
They do these things, and other mp3 makers will basically give up at the high-end of the market. Whatever minimal chance Zune had to make a comeback will have evaporated into thin air in Paris. And how the heck is Creative or any other company going to be able to come up with an OS and UI like Apple’s? Game over.
In the long run, the line between iPod and iPhone might blend a bit, but Apple wins no matter what we buy. Both are simply different iterations of the future mobile platform running OS X (sorry Palm, Windows Mobile, etc.) The only thing they have to worry about is maintaining proper feature sets between the different price points.
A year ago, everyone was talking about how Apple would lose out music sales to cell phone makers. Turns out Apple wins again, as they not dominate the music market but expand into others. In the big picture, it doesn’t really matter if the device has GSM, CDMA, wifi, or whatever- it’s all connected anyway, those are just technical specs in the long run. Those worrying about sales cannibalization between iPod and iPhone are missing the point- they’re all Apple mobile computer sales.