Former iPod SVP Tony Fadell on the discontinuation of the iPod classic

Tony Fadell in an interview with Fast Company:

It was inevitable something would take its place. You know, in 2003 or 2004, we started asking ourselves what would kill the iPod...And even back then, at Apple, we knew it was streaming. We called it the 'celestial jukebox in the sky.' And we have that now: music in the cloud.

I'm a bit confused by Tony's comment. Music in the cloud isn't replacing the iPod. The iPhone is replacing the iPod. A device is needed regardless of where the music is stored.