The iPod’s scroll wheel is doomed. Multitouch is such a compelling user experience, it must supplant the scroll wheel. Writes Newsweek’s Steven Levy in one of the first reviews of the iPhone:
Also, the new way of navigating–swiping down your song list or fast-browsing by skimming your finger on a vertically arranged alphabet on the right of the screen–is a superior interface.
I can’t see Apple selling another large-capacity iPod with the old scroll wheel interface. Everyone is going to want multitouch, and maybe soon Apple will have the economies of scale to put it on a sub-$400 device. I doubt the nano will go multitouch, but it’s the beginning of the end for the wheel.

