Given the size of the iPod Nano and iPod Shuffle I can see an iWatch replacing those if the pricing is right. Personally I'm hoping the iWatch will only optionally have a strap (so you can still clip it on if you prefer), or at least can be worn on the upper arm to avoid a dangling headphone wire. A model with limited storage would do as an iPhone/iPad accessory-only device, while versions with more memory can replace the smallest iPods. Beyond that, I think it makes more sense to combine the iPod Touch and iPod Classic; e.g - make the iPod Touch a more distinct device, perhaps with a curved back designed for gripping, and giving it the room to fit a 1.8" hard drive for capacity, basically make a real focus on capacity and gaming and distinguishing it from just being an iPhone for people with no friends to call (joking).