I wouldn't say obsolete as the iPod is less expensive, and many people don't need smart phones, and get their phones for free when they renew or change cell providers.
Even those that do, I suspect some may still want to use the iPod, especially the Nano as it is so small, and convenient, and has a much longer battery life.
Instead of making the iPod obsolete, I think Apple has very wisely expanded on a brilliant product line of portable media devices that will appeal to a very large market.
With Apples wise move to Intel processing, the brilliant design and marketing of iPod and iTunes, and now iPhone and Apple TV... this could easily be the best year ever for Apple with several more years of market growth and increasing profit potential.
Once all the hype of Apple's announcements at MacWorld begin to settle down and day traders move onto the next hot stock, such that Apple's stock trades level off, and once the SEC's investigation of Apple's apparent practice of back dating Steve Jobs' stock options is resolved, I'm definitely going to be beefing up my portfolio with Apple shares! 👍 👍