No it won't.
iPhone is a phone first and foremost. Its gaming capabilities are now and will always be leagues behind the current handhelds in terms of graphics, game selection (latest and greatest vs really old ports or gimped ports), and above all controls.
There is no difference between in the relationship of iPhone (and other smartphones) to handheld consoles as PCs to home consoles. Hell, in all reality, PCs are much more of a competitor because they can and do match or exceed every area as home consoles.
However, PCs have NEVER stunted the growth or acceptance of home consoles and there is no reason to think that the smartphone market will ever stunt the handheld market.
There are far more differences between these markets than simularities and as such, they will have little crossover. Most people will own a phone regardless of anything else and the people who'd consider buying a handheld console will do so anyways as their will always exist an experience that their phone simply cannot provide.
