It depends. In it's current form, no I do not think there is a long-term market for handhelds like the PSV and the 3DS. That said, I do believe that there is still a market for portable games that use physical buttons as well as the more immersive gaming experience that you can only find on dedicated handhelds in comparison to smartphones.
I think the handheld gaming console needs to be reinvented. People don't want to be carrying around a big clunky handheld when they already have a smartphone that takes up most of their pocket space and comes with its own, much faster graphics processing capabilities. My hope is that future handhelds can come in a much smaller form factor and ideally even utilize the processing capabilities of the smartphone that everybody carries through wireless to justify its existence alongside smartphones.
One thing the smartphone will never be is a hardcore gaming device. Even if they find a way to address the lack of physical buttons, it's just not a platform where you're going to get an immersive gaming experience... there are just too many distractions on a smartphone (it's like trying to play hardcore games on Facebook). I think that as long as there are hardcore gamers there will be a market for hardcore gaming handhelds: I just think that companies like Nintendo need to adapt the concept of the dedicated handheld to work alongside smartphones, not against them.
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