Apple could be about retire the iPod classic and iPod shuffle as part of a “product transition” that was hinted at by Apple in their last earnings call. The news comes from TUAW who seem reasonably confident that at some point this year Apple will axe the two devices — likely keeping the iPod nano and iPod touch, for now.
To back up their source’s information they cite a recent report from CNet in which it was noted that the iPods now only make up for 8% of Apple’s total revenue. As the above graph shows, iPod sales have also been stagnant or falling over the last few quarters and although Apple doesn’t break these figures down model by model, its believed the iPod touch is what has held iPod sales up. Interestingly the iPod’s 10 year anniversary is coming up soon on October 24th and as CNet said it would be a nice for Apple to say “It had a great run, now go buy an iPhone”.
The shuffle is basically the same form factor as the nano, minus a screen. The classic uses a platter-based hard drive, while Apple is largely transitioning to flash-based memory solutions. The shuffle's lack of a screen has been an issue since it first appeared as a memory stick with music playback functions. If Apple killed these off, all of its iPods would have touchscreens, and something tells me it wants it that way.
Concluding their report, TUAW notes that their source is “NOT an analyst” and that Apple’s plans are to consolidate the iPod line into just the nano (which would become Apple’s lowest-end iPod) and the touch. The iPod touch would become the premium iPod, with few changes except the availability of a white version.