Speaking about SW, you're not right. Os x used to ship with the iLife suite that wasn't designed for Pro's, but made everyone capable of doing something good in things that, in the years before, were done only by Pro's.
There have always been better SW's than iLife's ones, but whoever, buying a Mac, knew that he could start doing things without learning complex SW or buying others.
Speaking about HW, you're right when you say that an iPhone is better than an iPod, but this is true only if you don't put it under a specific contest. For a runner, a dancer or a sport's player, an iPod nano is, by far, the best choice for listening music while training.
Bringing your iPhone could be "part of the training"!!!
Opting for the Watch would force you to also buy an iphone, if you already don't have one, to bring only 4 GB (or 2?) of music with you and to even buy a pair of bluetooth phones...
Considering all of the above we understand why ipods are still sold!
I think Cook is a great economist, but not a great leader with a schematic view like Steve Jobs was.