I think Switch lite would make more sense next year than a more powerful/bigger Switch. Pokemon is such a portable-centric franchise that I think Nintendo is going to want for Switch to hit it's portable stride even more than it already has. It would definitely boost sales in Japan even beyond how good they already are.
This is true. Plus, there's also Animal Crossing. That's Nintendo's' two biggest system sellers in Japan coming out next year. Those two games plus a Switch Lite with a lower price tag would light the country on fire.
Hardware Comparison Threads:
PlayStation 4/Xbox One/Nintendo Switch: 2019 vs. 2020