Actually a few teardowns (the one I remember was done by CNN) revealed that the Wii U console itself (without gamepad) costs around $180 in terms of components so I think that overall (with manufacturing, shipping, boxing, R&D per unit) it should cost around $220. If they redesign the system and figure out a way to reduce the production cost of the Gamepad (there are alot of components in there that have not even been used or are not practical enough for use, like the built in sensor bar) I think they can sell it for a slight profit at a lower cost.

If Nintendo creates a micro console ($100-$150) and a portable based on the same architecture (most likely an ARM SOCs, which after watching Nvidias CES are becoming quite powerful) then I believe while they might not recieve console ports they can most certainly recieve a lot of ports of mobile games (key ones for various markets include games like Fifa); and yes these games are not really grapically advanced as their modern console counterparts but many actually run in HD already and they are much cheaper to make and port. I think the issue is that Nintendo is unable to carry a segnificantly more powerful console at this stage and sell for a reasonable price nor would such a console have a mass appeal (Sony and MS already have a highly established eco-system for these people), so I think that they might as well focus on a weaker and most importantly much cheaper platform so that they are at least a viable second console option and also so that they are accessible by the kids market in this highly competitve gadget industry.

One of the main stumbling blocks with the wii u is that many see it as an underpowered console. To pretend this is not the case is a major misconception by some Nintendo fans who, because they probably don't consider graphics to be a major issue, have it in their heads that the majority of people think the same.

Hence they blame the Gamepad, lack of marketing, lack of games, etc.

The most consistent reason constantly laid out why not to buy a wii u is the low power, not the lack of games. The games came and the wii u still isn't selling. The games will keep coming and it will be lucky to get to 10m this year.

For most of last year when you googled "Wii U" you got "wii u not as powerful as x360" or "wii u not next generation" for the first couple pages. Most harmful was probably "Third-Parties abandons wii u because it is weaker than x360". It doesn't matter if it is true or not. There shouldn't even be a debate.

Only a device as revolutionary as the wii remote can make the masses ignore graphics. What you are suggesting isn't that.

Pretending graphics isn't important will prove that they have learned nothing.

I believe that if MK8 and SSB are relative flops there will be few options left for Nintendo because nothing else is going to sell the wii u at that expected rate.

The one big thing I don't like about that idea is lack of diversification for streams of revenue. The reason why Sony could stomach the losses from the PS3, or Microsoft could buy their way into the video game market is because they are big companies specializing in a lot of things and different sources of income.

Right now, without the 3ds going so well, nintendo's losses would have been catastrophic, but while the Wii U is doing well, overall the company is in very good shape. 

This is also another reason I think they should go into mobile making mini-games and making their virtual console available while putting out a controller that attaches to an andoid or apple iphone. It's another source of revenue, even if their console market is going well, then they  are still bringing in money from that, sales from old consoles, software, handheld, among other things.

What if the hybrid flops...You've now got the fate of the entire company into that one product. 

If Nintendo insists on continuing the whole "different from MS/Sony, under-powered companion console, not giving a flip about 3rd party power demand", then they have to do two things to become successful again:

1- Offer something truly different than the competition (a gaming tablet w/possible home dock station is a start)
2 - You have to launch mid gen, or last (up to a yr after comp. releases) so Ninty can minimize the power difference, possibly even be on par/better

Wii U would have been far more successful if it launched in 2010, even 2011 at the latest. Wii U also would have been better off releasing in '13 or even '14, to get their games, OS and power at its best. As you can see, this is how you can screw up launching both too late and too early, at the same damn time (2012).

What would happen if the Wii U were to become successful in the middle of the generation?
For example, lets imagine in 2 years Nintendo is able of selling it for USD200 without losing money. And the casuals, now that almost a decade has passed since the first Wii begin to buy it a lot, to the point that most Wii Us would be sold from 2016 on.
Wouldnt Nintendo in that case be forced to support the Wii U for at least 8 years? If the majority of the customers buy it at that time, they will at least expect support for 4 or 5 years.

Next gen home consoles, if they'll still exist by then, will all be in equal power. PS5, XB4, and Nintendo Ultra will have mid-end PC specs of their time period. The difference will be 1st/2nd party games and exclusives.

There are plenty of improvements to be made regarding graphics, even for Nintendo's games, none of this "oh they're good enough now" nonsense, they wont be "good enough" until they reach CGI quality, which likely wont happen with their next console. I highly doubt they'll go with a console/portable hybrid, they'd be making much less profit from one console as opposed to two. Unless this console/handheld hybrid happens to be cheap and powerful enough to run around PS4/XB1 quality games in the future, and unless Nintendo can make as much profit with one as they can with both a console and handheld, it's not happening.

The problem with the Wii U's graphics is not that the games look bad.  I'll take Wonderful 101 over Knack any day of the week.  The problem is in regards to multiplatform games.  Games like Kingdom Hearts 3 would do well on the Wii U, but will never make it there because of the graphics.  It's an issue of making things easier for third party developers.

As for a unified handheld/tablet, I'm not sure how that would work.  Would they use the same games?  If So Nintendo would be cutting into its own sales.  Mario Kart DS sold 20 million and Wii sold 30 so some of those sales would be redundant.  I also don't like the idea of graphics being scaled down from the home console to fit in on the handheld.  I'll have to hear more about how this would work, but as of now I'd rather them be seperate for the most part.

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