If Apple comes in and takes a huge chunk of the game market, I think that would lead to some kind of partnership to fight them off, like Nintendo joining up with either Microsoft or Sony, neither of whom have any love for Apple either (especially Microsoft, lol).
Then lets see how bad Apple wants a slice of the game market and whether they're willing to pony up the hundreds of millions companies like Nintendo spend just on their game division.
One thing is for certain -- never underestimate Nintendo. Remember this generation when Nintendo was supposed to roll over for Sony in the handheld space and the crowing of the PSP as the new portable champion (hell screw Game Boy ... watch out iPod! PSP is coming!) was all but assured. Yet, Nintendo fought like a caged pitbull and ripped the PSP's jugular right out.
People who underestimate Nintendo simply aren't paying attention.
