The thing to remember is that a Fusion like device would start life as the mythical 'third pillar', just as the DS did.
The 3DS would be kept going until the Fusion had legs, and the Wii U would have its price slashed and be pitched as the casual machine. If the Fusion then took off, the 3DS and Wii U could then be phased out, or even used to try and crack new markets.
(On a side note; why aren't we seeing the big 3 taking serious swings at the Indian, Arabic and Latin markets? India has a similar population to China and has a rapidly growing middle class desperate to live a lifestyle akin to what they see in the West; it's actually the fastest growing market for English literature!)