While you might think that Apple products emerge from Steve Jobs' head, fully formed and perfect like any other offspring of gods, the inventor of the iPod was actually Tony Fadell (along with former Apple hardware chief of engineering Jon Rubinstein). Fadell, who took over the iPod division from Rubinstein in 2006, is leaving his position to take a "reduced role" as an advisor to Steve Jobs.
Jobs is a part of every device's DNA—they made the iPod louder than most MP3 players at the time because he's partly deaf. But Fadell was the guy who supposedly came up with the business model and actually put it together. Interestingly, the WSJ says he's being replaced by former IBM exec Mark Papermaster, who's taking over the Devices Hardware Engineering division and is more chip guru than gadget hound.
It makes some sense, given Apple's acquisition of P.A. Semi to make chips for iPods and maybe the iPhone. But it also says to me that they're definitely not thinking of iPods as dumb little music players anymore. [WSJ, Apple]