I can see how many people would argue BlueOcean to justify a lack of a console. But I think Sony will decide whether a DS2 is announced at E3. If a next generation PSP is in the works and will be shown at E3 then Nintendo will no doubt have a new DS to show as well. Keep in mind DS sales are beginning to drop, sure their numbers are still pretty high but could Nintendo's marketshare survive a new PSP.
If Nintendo thinks a new PSP is on its way then yes we will see new hardware at this E3. Now some will argue that this is Red Ocean strategy. Well Nintendo has to answer to share holders and with Nintendo's numbers spiraling slowly downwards the investors will demand a new hardware unit.
I think there is a 75% chance of new handheld hardware at this E3!
-JC7
"In God We Trust - In Games We Play " - Joel Reimer