It was exactly like I'd predicted years ago -- once an 128GB option comes to the iphone, the classic will be out.
I give Apple kudos for recognizing the classic can do pretty good business and almost monopolize its product category, instead of discontinuing it 3-4 years ago to cut SKU which would've been typical smartass silicon valley thinking.
The classic has bridged a period where we had virtually no feasible high-capacity option. Today if you just want space you can put a 128GB card (effective what, 110GB?) into a smartphone. Or if you want quality you can stick two cards into an AK and conceivably do one better than the classic.
What the average consumer does not want is to construct their own music library and tag meticulously. I tried it for 5-6 years on my library (and they must be tagged by me because many albums are so rare itunes cannot pull an auto-match) and in the end just gave up. I admire people like RuPaul who by sheer force of will has managed to organize a library to its maximum potential, but I just listen to radio these days. Regular radio, not pandora/rdio/spotify.
Apple is late to every party spec-wise so I would expect hi-res is already in development with them but won't show up in products for a while. If you look at what Sony's done so far to push hi-res you can almost see why Apple would not want to do it from their typical school of thought.
Also it's easier for sony and neil young to do all the hard work, introduce new stuff to people, prime the market, and then jump in once your customers are all ready. You can almost see Apple having chosen this path for their Watch.
