iPhone killed the video iPod

So apple released it's spanking new iPhone, I must admit that it looks fricken amazing, the web browsing/email looks great, and you can do funky stuff like portable conference calling and easily select your voicemails from a list (simple, but so cool). The one thing that really turned me on about this device (somehow the term 'phone' doesn't do it justice) is the iPod functionality. Effectively, this iPhone will also be the best, most amazing looking iPod ever, the current video iPods look crap by comparison. No doubt this will be a BIG selling point of the iPhone.

But this brings up a question: Will Apple release a stand-alone touch-screen iPod after all? I don't think so, the iPhone may have killed the video iPod!

Let me take you through my thinking here by looking at the pro's and con's of releasing a stand-alone video iPod prior/in parallel to the iPhone:

Pro's
Right now people all over the world are salivating at the slick, beautiful and easy functionality of the iPhone's iPod (try saying that ten times in a row). They would easily snap up a new iPod 'true' video iPod. Generating lots and lots of sales for Apple. Also, with the phone technology removed they could probably cram a lot more memory in the device (the iPhone only comes in 4 and 8GB flavours). Also, the iPod means that your relationship, as a consumer, is still 100% with Apple, and that makes us feel warm and fuzzy inside. Mobile phone operators on the other hand, seldom generate that feeling.

Con's
The main downside to releasing a new iPod based on the iPhone's technology is that this will have a negative effect on iPhone sales. Why? Well think about it, most people are tied in for long term contracts with their mobile phone service providers. If I can get the coolness of the iPhone's technology in a new iPod, without going through the hassle of changing my service provider, getting a new phone and transferring all my contacts over and paying between 500/600 US$, then why the hell would I get the iPhone. No, no, I think Apple will be telling us that the only way to get our hands on the 'true' video iPod will be to buy an iPhone, I hope I'm wrong though!