I do not think this is a big problem for Sony as much as it is for Nintendo. Sony went into the handheld market for the first time with the PSP and gained revenue, the NGP will most likely generate revenue at some point even if it is not the sucess Sony was aming for. If the handheld market dies due to smartphones, this will not effect Sony as much because
1) remeber the walkman? It became obsolete when the iPod came out and so sony retracted from that market, no harm done.
2) they will probably change their strategy to the new psp phone. This will work because Sony will have the appeal of unique games available that other smartphones will not have.
As for Nintendo, they are in a worst position becasue the handheld has always been their biggest revenue market since the game boy. If the 3DS does not do well, their stocks will plumet and who knows what else. Remeber when the gamecube came out and it didn't do so hot? Thanks the the gameboy advance Nintendo is still here today.
