Apple has a problem: they need a new iPod right about now

Apple's problem right now is that the iPhone makes the iPod look really old.

I know, I know: they are different products. But using the iPod functionality in the iPhone feels a decade ahead of the "old" iPod. I have both the iPhone and an 80 GB iPod. I no longer carry the iPod with me on a daily basis, and it feels weird to use it's little screen that you can't touch and that can't even do the cover flow trick.

Apple created a chasm in their product line: the iPhone is way too expensive as an iPod, but the video iPod is not so cool anymore.

The reason the iPod sells so much is because you don't think you're getting a second-class product. Apple killed that impression when they introduced a new coolest kid in the block.

If Microsoft was smarter and had better taste, now would be the perfect time to release a Zune 2, while Apple struggles to fill the void between the way-too-expensive and the not-so-cool-anymore.