I believe there would be a market for it, but it wouldn't take off as such. I don't know if this is down to Apple stopping production of it or some other reason, but ipod sales dropped from a peak of nearly 60M sold / year in '08 to a final number of 14.4m sold in '14 according to [0]. The bigger number though is the percentage of Apple's revenue, which peaked in 2006 at 40%, down to just 1% in 2014.
By then, the iphone and associated app revenue had long taken over their revenue. But on the other hand, if they applied the same metrics to Mac they would've discontinued that years ago too, but they need Mac for people to build iPhone apps.