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Has the iPod run out of new tricks?

Lee, whose company's technology has been used in the iPod's scroll wheel, declined to comment specifically on what might be next for the iPod, but he said that broadly speaking, music remains one of the most important applications for future handheld devices.

In any case, Kevorkian said that Apple may have missed an opportunity to follow up on its successes of last year, which included the nano and video iPod. "Apple had so much momentum coming out of 2005," she said. "That was momentum they could have banked on by introducing new products in the first half of 2006." (It should be noted, of course, that Apple could conceivably introduce a new model before the Christmas shopping season.) Even without new models, the iPod has continued to reign supreme. Apple still boasts a 75 per cent share of the US retail market and is the world's best-selling MP3 player.

Gartner's McGuire says that while it's noteworthy that SanDisk has managed to come out with a larger-capacity player, people want to move music onto their device with ease, a feat that's come more easily for Apple, which controls both the iTunes software and the iPod player. "The integrated seamless experience is still their strong suit," he said. "That's still the challenge that a SanDisk or other hardware player faces."

Even Microsoft has indicated that it expects its Zune to take some time to put much of a dent in the iPod.

At its financial analysts' meeting last month, Microsoft said that it expects to spend hundreds of millions of dollars in the coming years to make Zune into a serious iPod challenger.

"It is something that is going to take time," said Robbie Bach, the former Xbox executive who now heads Microsoft's overall entertainment and devices unit.

The company hasn't said that much about the player, though last week it offered indirect confirmation that the first device will play videos by noting on one of its semi-official blogs that the product will come preloaded with music and video from record label EMI.

Microsoft's mere presence has wreaked havoc on the non-Apple part of the market, particularly since most of the serious iPod rivals are part of Microsoft's PlaysForSure alliance built around the Windows Media digital rights management technology.

Microsoft has given no indication that any Zune service will work with other players, or that services like Napster or Rhapsody will work with the Zune devices. The software maker has said it plans to continue supporting PlaysForSure, but the real question is how much marketing muscle it will put behind that effort.

"That's a big part of what I think SanDisk and every other hardware manufacturer has to be wondering," McGuire said. "What's going to happen when Zune hits the marketplace?"

IDC's Kevorkian said that the software maker may be waiting to see how well it does before deciding how much effort to continue to put into PlaysForSure.

"Microsoft is in a position where they can hedge their bets," she said, but added "if Zune is successful in the short or long term, we believe the Microsoft is going to de-emphasise [the] Windows Media technology"