In my opinion the smart phone/pda market vs. the handheld gaming market is similar to the PC market vs. the home console market ...
More and more people will need (choose) to carry around a smart phone/pda and this means that in the future many people will choose to play games using these devices. Now unless a smart phone/pda ends up controlling the market there will be noticeable differences between hardware and user interfaces which will frustrate developers, and most games will be developed for the lowest common denominator across all devices; this should result in games with (fairly) clumsy user interfaces that tend not to take advantage of the processing power of these devices.
At the same time Nintendo will be able to produce a new system which has an improved user interface and increased processing power; both of which will soon be taken advantage of by quality developers.
