Yes, the mobile phone market is a threat, but it can never kill Nintendo.
Nintendo still has the 5-15 year old market locked up because the parents won't buy fancy phones with 2 year contracts for them.
Either way, the home consoles survive despite there being cheaper PC games, and no market has died because of internet games. Sure the DS/PSP will lose some to the mobile market, but overall there is plenty of room for Nintendo to expand at the same time the mobile market does.
@better value proposition
it depends on your needs. I can buy a phone with a $50/month contract just for phone use and a DS for games, and it will cost me a lot less over 2 years than buying a iPhone with a $100/month contract and games for the iPhone. If you need your phone to surf the internet too, then yea, the value might be there, but personally I'd rather not sink so much money into my glorified pocket watch.
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