Phone hardware market is highly competitive and it's a race to the bottom. It's also just controlled by carriers. Where's the Xperia Z2 phone for Verizon? You need to be the 800-pound gorilla to control carriers. Even Google can't get their phones on Verizon.
While I think a Nintendo phone would be neat concept, I don't think it would sell much or make much profit. Phones quickly become outdated and Nintendo would have to be releasing multiple devices every year to be relevant.
Being in the smartphone hardware business would be counter productive to selling Nintendo games. What's the point of making your own phone to have a user base of a few million, when you can publish your games on the available markets and reach almost 2 billion smartphone owners and counting?
