What now for the iPod?

Come Tuesday, Steve Jobs will take the stage in San Francisco and, by all accounts and predictions, will roll out some new iPods, with lower prices and higher capacities. A bevy of news stories will erupt... and then what?

Well, everyone will forget about the iPod and go back to their iPhones, that's what.

The term you're looking for is "cannibalization." Apple had to have known about this since the iPhone's launch but that doesn't mean it planned for it: The whole point of the iPhone is that you no longer need to carry two devices and can listen to your music, complete with Apple's suave interface, right on your phone.

The problem with that plan is that for every iPhone you sell, you sell one fewer iPod. And since the iPod has been a true cash cow for Apple—the product is nearly universally agreed upon as the one thing that turned the company around and saved it from the scrap heap in 2001—giving up on that market is, at best, a seriously spooky omen.

In fact, it may already be too late for the standalone iPod: iPod sales are already flat, Fortune notes, and may soon be on the decline, a far cry from the recent days of double (and triple) digit growth.

And so it's up to Jobs to save things. Sources predict that he'll trot out a redesigned iPod nano (which rumor has it looks a lot like the nano from two generations ago), a minor refresh of the iPod touch, and a new version if iTunes with—gasp!—a music recommendation system. And as Fortune notes in far more cautious language, none of this is even remotely exciting. It certainly wouldn't convince me to trade in my iPod for a new one (and I'm still rockin' a 4G Classic!).

And that leaves us with the least refined tactic in the bag: Price cuts. Ben Patterson has predictions for pricing, and he's probably on the money. But will the nano still sell even at $200 for 16GB? I think Apple will have to do better than that if it wants to keep offering four different MP3 players. (That said, I doubt it will. Hubris runs high in Cupertino.)

Spill in the comments: When's the last time you actually paid for an iPod? And what would it take for you to buy another one?