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iWatch May Replace iPod in Apple's Lineup

Apple's iPod music players could be going the way of the Dodo. Analysts expect sales of the iPod will decline as a result of consumers purchasing the rumored iWatch as a substitute.

Christopher Caso of Susquehanna Financial Group believes the iWatch "would essentially replace the iPod in the consumer portion of (Apple's) product lineup," citing recent talks with sources from Asian supply chains. It's possible that the watch takes over some of the iPod's functions, which include storing and playing music, movies and apps. 

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Caso told Barron's Tech Trader Daily, "While we don't expect (Apple) to discontinue iPod for some time, we also don't expect an iPod refresh this year." This is in line with a statement from Apple CEO Tim Cook in an earnings call earlier this year, saying that the "iPod is a declining business."

Apple is rumored to start production of the iWatch in the fourth quarter of 2014, a projection that Caso says now carries more weight thanks to checks from a March trip to Asia. Two models of the iWatch are expected -- 1.3-inch or 1.5-inch face. We also expect to see an LG-made flexible OLED display used as the canvas for an iOS interface. Previous reports also indicate the iWatch will feature a slap bracelet design that will hug your wrist.

If Apple does debut the iWatch later this year, it will face some serious competition. In addition to existing smartwatches such as the Pebble Steel, the Samsung Galaxy Gear 2 and Gear Fit, the iWatch has to contend with Motorola's Moto 360 and LG's G Watch. The latter two will be powered by Google's Android Wear system for wearable devices. We look forward to watching Apple battle its rivals for smartwatch supremacy.

Follow Cherlynn Low at @CherlynnLow and on Google+. Follow Tom's Guide at @tomsguide, on Facebook and on Google+.