Is the iPod a goner?

Time to start mourning the death of the iPod.

Yes, the iPod. Maybe it's just creative destructionism at work, but it looks like Apple's (AAPL) iPod music player is now a declining product line.

And while Apple was crowing -- probably rightly -- about its latest quarter, it's worth looking at what's going on with the company's product mix.

So, here's the story:

Apple said it earned $1.35 a share in its fiscal third quarter, up 13.5% from $1.19 a share a year ago. Revenue was $8.34 billion, up 11.7% from a year ago.

Wall Street had estimated earnings of $1.17 a share and revenue of $8.2 billion.

The stock, down 0.5% to $151.51 in regular trading, jumped 4.5% after hours to $158.25.

If the price holds on Wednesday, the shares would end the day up 85% on the year.

Right now, Apple is generating more revenue from its iPhones than it does from the iPod. iPhone sales hit $1.69 billion in the fiscal-third quarter, up 303% from a year ago. Apple literally can't get the devices made fast enough.

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IPod sales were down 11.1% to $1.49 billion. Unit sales were down 7% year over year and 7% from the fiscal second quarter.

And the trend will continue. Peter Oppenheimer, Apple's chief financial officer, said the company expects sales of the traditional iPod to decline as features are cannibalized by the iPhone and the skinny iPod touch.

That's not the only Apple product experiencing sales declines. Sales of the desktop versions of the Macintosh computer are falling as customers switch to laptop versions of the Mac.

Unit sales of desktops fell 10% in the third quarter; revenue fell 17.8%. Part of the problem may be that desktops aren't cool.

Another issue may be that publishing companies, who use Macs to produce magazines, newspapers and the like, are simply not buying because their business is lousy.

Now, laptop sales were up 12.9% to 1.75 million units, but revenue for the laptops was actually down 1.7%. But Apple's having problems meeting demand on these products as well.

So, what does all this tell us about Apple? It remains a most amazing manufacturer and marketer of interesting products.

And not just the iPhone. Its iTunes business generated $958 million in sales in the quarter, up 17% from a year ago.

It's an even better manufacturer of buzz. Half the buyers of its computers at its retail stores had never owned a Mac before. The iPhone seems to be drawing in customers.

But if Apple didn't have the iPhone and its iTunes business, investors would be complaining about stagnant sales.

Sales of Macs and iPods were down 8.8% year over year.

For the fourth quarter, Apple expects revenue of $8.7 billion to $8.9 billion and earnings of $1.18 to $1.23 a share. Wall Street is expecting $1.30 a share and revenue of $9.1 billion.

Don't pay attention to Apple's guidance. As noted on Monday, the company always underestimates. Their guidance for the third quarter was revenue of $7.7 billion to $7.9 billion, 8% below what was actually reported.

As of today, Apple is the 22nd-best performer among stocks in the Standard & Poor's 500 Index ($INX) and and 10th among stocks in the Nasdaq-100 Index ($NDX.X).

It's the 18th-most-valuable company in the world. Its $135 billion market capitalization is greater than General Electric (GE) and Chevron (CVX)  and nearly as big as JPMorgan Chase (JPM).