It's selling at a clip lower than the PSP was in the West in its early days.

Even Iwata has said they are unhappy with 3DS sales in the West.

you dont have to tell me, man. I see whats happening, for the same reasons that Gamerace just pointed out. Japan has always been big on handhelds much more so than in the west. DS was kind of an anamoly IMHO and we are just seeing numbers go back to hwo they were pre DS era. IMHO thats a good thing, that keeps the no name cheap devs away and let them make their nonsense for phones. Let the bigger boys make games for 3DS/Vita, the audience who actually cares about video games.

It's largely a Christmas product.

It seems to me like none of the Western "bigger boys" are bothering with either handheld period. It's almost like a Japanese specialty product being sold in a Western market to a niche audience.

"Nintendo has released several color variants."

They have only released four 3DS XL colors in America; red, blue, pink, and Pikachu. All of those colors are targeted towards kids, and not older gamers. I have wanted one since August, but refuse to get one until a black color is released.

It seems Americans dont care for hh anymore...in Europe is doing pretty good

I feel like more than the western support issue is the fact that there is a ridiculous stigma among teenagers and even children regarding Nintendo products. After the Wii and DS, it's no surprise that Nintendo was given the "kiddie" label and I'm afraid it'll be a hard one to shake. As a 3DS owner and a high school upper classman I've experienced these sentiments first hand. On several occasions, after taking out my system I'd be greeted with "Oh my god, you still play DS?" as well as snickering, sympathetic head shakes, sighs. They aren't necessarily doing this to hurt me (even some of my friends have said this to me) but instead unknowingly falling in line with what is considered "cool". It's simple, Nintendo is no longer "cool" other than in certain circles. Until Nintendo can reinvent themselves as a company producing products for both young children and teens the slow sales will probably continue during off months.

Don't get me wrong, that isn't every teenager. Several of my friends and people I have classes with have admired my 3DS (especially once I got an XL) and inquired about the system's price and game library. Most of them have said they want to get one in the future. The problem is, this group is people is small compared to the many that fell Nintendo products in general, especially the DS (many still don't understand the fundamental differences between 3DS and DS), are for little kids even though they enjoy their time with Nintendo products when they're given the chance.

The irony in all this is they'll chastise me for playing games on my 3DS and then go back to playing Angry Birds on their phones. 

Yeah handhelds were never "cool" in the West (PSP tried to push this angle but eventually failed), but yeah, now that smartphones are everywhere I have to imagine they are completely cannibalizing what kids gravitate to once they get to junior high school and by high school it's probably a lost cause for Nintendo/Sony.

I think every thought I have on the matter has pretty much been said.

If you take a look at what's charting in UK software every week it's just dire for handheld games.

It's hard to convince Western developers to developer for Nintendo's abusively closed platform. Why develop for the 3DS when you can develop for iOS/Android with:
1. Better developer tools in English
2. Far superior download platform like App Store/Play Store
3. Open app submissions (anyone can make a game and submit it, without paying for overpriced developer kits)

As smartphones become more popular, dedicated handheld will die. America is hit hardest due to it's smartphone popularity. As smartphones get more popular around the world, the 3DS will continue to fall.