I still think people are exaggerating on the relation between handheld gaming on smartphones and tablets and home consoles.
Do people really expect for everyone to become a one type of gamer? The success of Wii and DS among casual gamers proves that even that type of consumer is divided between those who like it portable and those who like to play in front of a tv.
The only real importance about this S3, isn´t actually the chip itself, is the ability to play it on tv your mobile games- like the future Apple TV and Wii U.
Graphics are great but they don`t determine "winners" sales wise, games do and not all formats have the same kind of content.
MS, Sony and Nintendo offer not only different play formats, but they also have the titles the core and casual gamers love and that won`t change because of outside competition or interference.
