It's an undergraduate pre-engineering (think introduction to) design class. No requirement to be ground-breaking, innovative, or even commercially viable. Learning to do market research, address trade-offs, and balance competing technical and non-technical issues are part of learning product design (which is way different from engineering analysis).

There are several bike generator products out there (best IMO use a dynamo hub on the front wheel) that combine a rechargable battery and various USB-like options for recharging portable electronics. Some include iPod-compatible mounts and a way to mount/protect an iPod or iPhone. Do your research and see what you can come up with. There are some interesting tradeoffs for size, weight, weather protection, vibration, safety (shorts, electronics, and no bits falling into the spokes!) and generating capacity. Consider if it's intended to be a range-extender (assumes wall-jack available someplace for full recharges), or you expect it to keep electronics going for several days (unsupported touring/bike-packing scenario), and if it is solely for add-on electronics or you want to power lights, too. Humans don't produce a lot of power (the capabilities of the pros are the 99th percentile, at least), so a few watts, before conversion and storage inefficiencies, is going to be the most you can expect to harvest.