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It'll end up splitting the Vita market.  Since the Vita has capabilities that the Vita TV does not, namely the touchpad on the back, if the Vita TV does gain market share developers will be forced to decide whether they want to target the PS Vita handheld or the PS Vita TV.

The PS Vita I think is smart for PS4 buyers/owners, but I don't think it's a smart thing for Vita owners.