If Sony decides to drop out of the handset market, they should either allocate their game development resources to support the PS4 or spin them off. Sony really isn't in the business of developing games, as opposed to Nintendo.
Their business model is based around the fact that they're a conglomerate and try to generate economies of scope, with the PS4 and the Vita serving as a platform to do so.
Nintendo's business model used to be about profiting off the hardware and off royalties by having a large install base. With the loss of margins on their hardware and their small install base, Nintendo would do better by either liquidating or changing their business model to that of a game developer, since they have such a core competency in that.
