Okay, I see what you're saying I believe. I think you're saying that Apple might continue to put out new versions of the iPod semi-frequently as they do now (which I am certain they will) but that they won't be as innovative, i.e. there won't be that much different about them because there is no competition?
That makes sense, but the only problem is that that argument is based upon the premise that the Zune was in fact a legitimate competitor, which quite frankly it wasn't.
In that chart Zune isn't even the #1 competitor to the iPod. That chart is from 2007, but the article states that last year iPod had 77% of the digital media player market, so the Zune HD obviously didn't change Apple's foothold much.
As the other guy said things did change a lot since 2007 since the Zune HD only came out like last year. I'd say as of recently Zune probably was holding 10% while everyone was holding 5% max total together. And Apple was holding 85% or whatever the stat is. No matter what Apple will always release new iPods every September but when you have even Apple fanboys impressed by the Zune HD, that would force Apple to start adopting higher res screen and a new better gui.