Nintendo have said before that they start designing the next system from the moment their current one hits shelves.
This does not mean Wii U will be replaced any time soon.

it has to do badly as virtual boy for that to happen...but even then you would be surprised.

Backwards compatibility was another reason it was underpowered compared to the competition.

True as far the CPU goes but with a higher power ceiling they could have included a much beefier GPU.

If they didn't have to choose the IBM CPU for backwards compatibility they could have chosen an APU from AMD (another long standing Nintendo partner).

IBM also makes all the Wii U CPU chips in factories in the USA, so they're probably more expensive to produce.  IBM also produced all the CPU chips for the Gamecube, Wii and Wii U in USA factories, so they might receive a loyalty and scale discount ..but still how much of a discount?

IBM also announced yesterday that it sold it's chip business to GlobalFoundries for $1.5 billion, but the factory in East Fishkil-New York where the Wii U CPU is made will remain open and fully staffed. - source 

I think it would be better for them to go the x86 route next gen, because they'd save on R&D and per unit costs.

Agreed; it's become standard and them being the odd one out makes porting harder.

I don't think they will do it. But i really hope they do.

OK, if this is for home consoles, it tells us that also the next Wii will be relatively low-power consumption, and also that it will come no sooner than at the end of 2017 (they wouldn't need a new HW engineer with the skills to choose key components if they were in a more advanced state of development). By 2017 end mid-low-power consumption CPUs and GPUs or APUs will run circles around current most powerful ones, so if Nintendo won't be avaricious with RAM, there won't be any problem about HW power. Most probably they'll use very scalable multi-core versions, to be able to stretch the specs initially decided adding some cores, if necessary, to manage new HW features and innovations devised by the overall system architects.

This