It's a growing market and we now have 3D smartphones operating on dual cores. Numbers already indicate that the Iphone gamers generate more profits than those with PSPs.

Battery life remain an issue though.

I ain't buying a handheld in the future.. Will upgrade my iPhone and with the increasing support it's getting.. I don't think i'll go back..

When the make the ability to power devices though kinect energy from your heart to power phones etc. Thats when Mobile Gaming will take over consoles( whats the point when you can have an small device you can play on the go and they can have HDMI ports built in so can be plugged directly into the TV. SONY are already ahead on this, they are putting in an over the top quad core CPU in the NGP which will be the first mobile comerical device with one, but its full power wont be used because it drains the battery in an matter of seconds. But they are doing it like Blu ray to lower costs of production so when batteries get better they have the production power to create NGP's at an afforable price with long lasting battery power. 

So while Smart phones will eat away at the current dedicated gaming platforms, once battery improves Handhelds will grow and chip away at the consoles 200 million consumer market share which SONY and Nintendo are building for but this leaves oppunities for Apple to stake there claim as well as MS and other electronics companies to come in. 

Like many people are saying, next gen will be the last console gen, with Mobile gaming on dedicated gaming platforms and smartphones/tablets will be the most popular before global 4G-5G networks will bring in cloud gaming devices that takes down the dedicated handhelds unless they adapt. 

Ones things for sure, by 2020 we will be playing our games far different to now. SONY, Nintendo and MS current controll of the 200 million strong console market will be consumed by mobile/internet market of some 900 million people. 

#1.) Take that everyone who thought smartphones couldn't compete.

#2.) These numbers may not be telling the whole story. Mobile market could indeed be growing, which gives the impression of dedicated handhelds shrinking.

Either way, I am not really worried about grabbing any new handheld right now because my phone gives me plenty of enjoyment, not to mention the games cost very little.

Playing Eternal Legacy now and while it isn't perfect, it only costed me $4.99. If it was on my DS it would have been $34.99.

I'm all for the lower prices.

I will not buy a handheld because I have everthing I need on my smartphone.