iTunes Store makes more money than iPods, for awhile now
Kind of sad to see. iPod revenue is on the order of 1.2b in calendar Q1 '12. It seems Apple would prefer to deprecate it than to reinvent it in some way. DAPs are not huge money makers to Apple anymore, but it would be cool to see Apple reinvent it.
The iPod nano is halfway to a wearable computing device. Apple could do the work to get it all the way there. Like making it a 360 x 240 2" screen that can be worn like watch. It could have a sensor cluster dedicated to biometrics. It can support iCloud syncing and notifications. Turned it into an accessory for iOS devices. All old ideas.
As for the iTunes Store - music, apps, books, videos, etc - it is on a run rate of 25 billion dollars this year. 6.5b in Q1 '12. That 30% Apple takes is not trivial. Not sure how much of that turns into profit, but I can definitely see the iTunes Store becoming a bigger portion of of the pie.