Originally Posted by solipsism
They are already saturated, if they limit their limit they limit their market potential even more. Typically we see a shrinking of a product line when a impact is restructuring due to negative profit.
For those reasons I'd think it's an additional iPod over a deduction of iPods in the line up. If they remove the Classic then it could maintain the same number, though I think the Classic will likely have life left at a reduced price after they stopping up the capacity of the 1.8" HDD platters it uses.
All very true up till now, but consider that this is the first major iPod refresh since the historic shift away from dedicated music players (brought on in large part by Apple's own efforts with more sophisticated mobile devices) has begun in earnest. Apple isn't going to be introducing new products into a growing market that it needs to keep ahead of to dominate. They're introducing products into a shrinking market that will probably never see another viable competator introduced.
So it seems to me all bets are off. Apple could well radically shake up the iPod lineup, with the Touch taking its place as "the" iPod, and all
other models replaced by something novel and quite different. Really, they don't have a lot to lose-- it's not like there's a great many people who are going to run out and get Zunes or Creative players just because there's not a sub-$100 iPod or nothing larger than 128GB.
Now, granted, shrinking market or no Apple still sells a lot of iPods, so they're not going to just throw some crazy thing out there with a take it or leave it attitutde. But Apple famously skates to were the puck is going to be, and the writing is on the wall for "simple" iPods.