I have two theories which will continue to allow Nintendo to remain a solid portable provider.
1. Games. Regardless of anything else, games are by far the biggest differentiators for someone to purchase any game console. Wii Sports, Pokemon, Wii Fit, Halo, Brain Age, etc have all proven time and time again this generation that a quality game will massively push the sales of a game console. In Nintendo's case, as you even admit above, they are great innovators and drivers of 1st class amazing games that propel their hardware business.
2. Children. I think its strongly arguable that portable gaming console heavily favor children as owners more so than home consoles (especially outside of Japan). As such, the majority of the buying decisions come from the parents.
Now based solely on my immediate surroundings of friends/family/coworkers, I would say that when it comes to phones (a portable gaming consoles biggest danger of disruption), children won't have the phones necessary for gaming at a high level, either with apps or online.
Ages 0-9 w/ any cell phone for me is 10%. Smartphones or any with data = 0%
Ages 10-13 w/ any cell phone is 80%. Smartphones or any with data = 0%
Ages 14 w/ any cell phone is 99%. Smartphones or any with data = 30%
Yet, for just the DS it goes from 75% to 100% within the first two segments.
So, I would argue that the largest market for portable gaming consoles, simply won't have the option for phones for portable gaming. Because their parents can't justify the more expensive phones combined with monthly cell phone costs and data packages. Instead, its a better value to buy a gaming machine where they costs more controlled based on what and when the parent wants to spend the money.
Now I do recognize that I am not using a great sample of data and times will change. Its very much possible that cellular data plans will change over the next 10 years and could be come much like minutes are now in family plans. i.e. practically unlimited for little cost for additional lines. If that were to happen, then the only differentiators would be Nintendo games and that may simply not be enough to remain a leader. Even with the Gamecube they were profitable, so it will be enough to remain solvent, but not a leader.
