Ever since it is all about the iPhone and iPad, Apple is predicted to kill the iPod.
Rumors about Apple killing the iPod line all together or specific models have been around for a while now. Yesterday CNET and TUAW filed reports though claiming that indeed will happen this year. TUAW says that the iPod shuffle and the iPod classic get discontinued this year. The iPod nano and iPod touch would continue to stay and will actually get an upgrade this year.
Apple earlier this year already killed very silently the MacBook. I can imagine that Apple is streamlining the iPod line and only moves forward with music players that have a touchscreen.
CNET sees actually the whole iPod line to be killed off by Apple. I do not think that will happen though. Yes the iPod is only 8% of Apple's total revenue. 8% of Apple's revenue is though a ton of money. A clean-up of the iPod line is in order. Killing it does not make sense.