iPOD NEWS: movie store on it's way despite decreasing sales!?

Here is the full article from UK's the Observer:LINK.

Here is the gist: Apple's iPod has slumping sales, down from 14 million last Christmas to 8.5 mil in the first quarter of 2006 to 8.1 mil in the second quarter. Quoting the writer, "If I were the manager, I would be wanting my people to explain what is going on. The iPod is wilting away before our eyes." The article sites new cell phones with enhanced mp3 players being a key factor to the declining sales. In a attempt to continue the growth of the iPod, Apple is suspected to launch the iTunes Movie Store to compete with the already launched Amazon.com Unbox Video and a future site by Wal-Mart.

Also rumored is the iPhone, Apple's take on the cell phone with the design and appeal of a iPod.

*image from engadget who also rumors we may or may not see an updated nano, a new version of iTunes, a new Airport Express-type video streaming device, a new iMac.