Asymco, who split their attention between creating mobile apps and analyzing the app industry, recently took a look at iPod vs. iPhone quantities shipped. As you can see, iPod sales create an almost perfect sawtooth-wave pattern, with big spikes in Q4 of each year (i.e. the Christmas rush) before levelling out the remainder of the year. But iPhone have grown steadily since its inception, and finally beat the iPod numbers in the second quarter of 2010 (admittedly, during one of the aforementioned plateau periods).
Asymco conclude "The iPod has been quite resilient as a product line but with both the iPhone and iPad embedding an iPod, cannibalization is happening."
Apple, of course, has regularly upgraded and enhanced the entire iPod line: the Nanos, for example, have added camera/video capabilities and are now touchscreen devices, which the iTouch itself was positioned as the device for those who liked everything about the iPhone except, y'know, the phone part (and between Wi-Fi VOIP apps and external hacks, telephony could be had as needed). And for those who want just the music, ma'am, the 160GB iPod Classic continues to be your storage giant.
But as the iPhone continues to add storage space and lower its price, it'll be interesting to see how much of the iPod line goes the way of the carrier pigeon…