The 3DS is still in an enviable position. Some of the casuals who bought the DS are now using phones/tablets - 25 million people purchased Nintendogs, the second best selling game on the DS, we can assume a considerable chunk of those people are casual gamers.
As over 40 million sales, and climbing, can attest there's still a large market for a dedicated handheld gaming device. It's just not as large as it was a mere 6 years ago. It's more of a market share problem than something Nintendo has to change.
Nintendo also makes far more money off of software sales than hardware sales. While the DS was very good to them (top 15 selling games were published by Nintendo!); the 3DS is also doing well software wise (13 of top 15 published by Nintendo).
"On my business card I am a corporate president. In my mind I am a game developer. But in my heart I am a gamer." - Satoru Iwata
