They lightly touch on services like Last.fm and Spotify here, but I really think that's where the industry is headed. Yes, people are opting in for 'all-encompassing' devices like smartphones to play their mp3s, but I think even the idea of playing mp3s stored on a device is dying out. Streaming music is where everything is headed.
By this logic PDAs are dead, calendars are dead, pocket calculators are dead, heck even phones are dead. But not really, they've all just converged into a single smarter device. We currently call it a smartphone, but to be honest a better name would be "pocket computer" or "pocket tablet." Heck, I spend a lot more time using my "phone" to read books, watch movies, listen to music and browse the web then I use it for making phone calls.
I don't think personal mp3 players will ever die out. They may lose popularity among adults but I think they will continue to live because of the number of younger people whose parents will not allow them to have a phone. Also because of those who don't want or can't afford a smartphone. Personally I choose to use my iPod over my smartphone for several reasons, mainly to save battery on my phone.
Plus, I can store a lot more songs/video on my iPod. For people who have a ton of music, or want to have a decent amount of portable movies and iPod or other media player is still the way to go. Yes, there's youtube and mobile apps, but then there's the battery issue that you brought up.
Another problem with streaming apps is they require a connection. I fly alot, not airlines so much but mostly by myself in small general aviation aircraft. Now sometimes I can get a connection down low but most of the time I want to be higher so I can ride more favorable winds. I know airlines are starting to have on-board wifi but I have never seen it to be free. I love my iPod and it is great for flying because I don't have to worry about a connection or listen to ads.
My 160 gig ipod is built like a tank. It will never die and I love it. The self-contained nature of the player will ensure its validity for some time. I can leave it connected to my (or anyone else's) stereo and that's that. No computer, no wifi, no problem.
Gotta hand it to high capacity MP3 players for the time being, until the cloud and wifi become much more ubiquitous there will be no substitute for having your whole library in your pocket. But honestly, I don't need that much music on me all the time. I rotate a few gigs on my phone and stream the rest of my library through Play when I want it. And that 160GB iPod is not a tank, bounce it around in your pocket for a few months and it will die. I've had two HDD iPods and they both died after about two years even though they were rarely dropped, but having a physical job and them being in a pocket shook them consistently enough that the drives eventually petered out.
I've had mine for 5+ and it's still hitting them outta the park. I don't know how. But you're right. They will most definitely be obsolescent once wifi becomes a commodity. If I had a say in the matter though, it would be all music on me because you never know what kinda party it's gonna be. Might as well have that random footwork in hand. Just in case you wanna stick your dick in the mashed potatoes.
I'm convinced MP3 players will continue to remain a strong niche. Personally I prefer MP3 players to listen to music as they are less (tempting to get) distracting than smartphones and sometimes it's nice to just zone out and listen to just music. Secondly, MP3 players may have superior sound quality and are easier to use when listening to music thanks to designated hard-buttons.
I thought I would be using my Creative Zen for another decade at least. But, it hasn't left my office drawer for nearly two years now. Android killed it dead. I'm not much of an audiophile, but as a commuter - I haven't noticed any difference in quality. Oh, except for the .flac support that is native in Winamp for Android. That I noticed.
What I'd be interested to know is if the people who still opt for mp3 players are headed for more "smart" devices like the iPod touch, or going with devices that are truly meant for simply listening to music like the iPod classic. It would seem like the people who are choosing to buy "smart" mp3 players like iPod touches would be declining as it is now much easier to get a phone with the same features for about as much money, while the people who just want to listen to music would still want a basic mp3 player that can hold more songs..
Nope. Different software, processors, different firmwares, different qualities of other components, variable levels of support for digital music formats and encodings, etc. All result in a different quality of music playback and fidelity. Take a look at anythingbutipod.com, for example.
I can't see myself ever ditching my mp3 player. First of all I have too much music to fit on a smartphone, and I refuse to get a smartphone anyways because of the data plans. I feel sales of mp3 players will decline, but there will always be a market for them. I don't see any technology on the horizon to replace mp3s. Steaming is nice, but is only useful so far as a reliable internet connection is available (a problem while driving, going for a run, etc.)