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Nintendo still sells 3DS' because phones lack Nintendo games (officially). Nintendo could release their own smartphone/portable-console fusion, and since they don't aim for profits as big as, let's say, Apple's, they could sell it at a lower price, unlike the iPhone's obscene price and profit margin. And Nintendo also gets more profits from the games.

Nintendo just needs to stop using their heavily customized hardware, that costs them much more on R&D, only to get not-so-stellar results. They should start using more standard hardware.