Its a case of good hardware sales (no-where near DS mind) and lately low software sales. Like NJ5 said its not a given for a successor in my view, though they probably will. The psp needs more original games, just like a successor would for it to have good software sales.

"Easy" to pirate is a very relative thing ...

• The PSP and Dreamcast required no hardware modifications, and everything you did need was available at most stores that sold the systems.
• The DS and Gameboy required people to buy products from somewhat untrustworthy websites
• The XBox, Playstation and PS2 required you to buy a product from a somewhat untrustworthy website and modify your hardware
• The Gamecube required you to buy a product from a somewhat untrustworthy website and either use a very expensive disc medium (8 cm DVD) or buy a case mod.
• The N64 required you to buy a very expensive add-on for your system.

 I agree that there would be many issues that they'd have to overcome, namely the earning of trust from 3rd party developers. 

As for it being virtually impossible, I think you are being overly bleak in that statement. Currently, isn't Nintendo in that same process? They're doing quite well, too.

I believe it has been profitable enough to warrant another stab and Nintendo's handheld dominance. This time with a 20/20 hindsight in the psp vs ds and wii vs ps3 generations.

They will look at a more cost friendlier device probably still using UMD technology and a single screen. I would think it would have all of the same features plus two analog sticks.

Horse power won't be a significant jump though. Probably small increase in CPU/GPU, but a large increase in memory to help with load times.

Sticker price around $150, black and/or white w/ game.

Of course.

Ask the gamecube ;p

Off topic:

The next gen psp need to have these features

1. 360 level graphics
2. HD 720p screen
3. another analog stick
4. embedded 3.0MP camera
5.improved flash player and interenet browser

6. HDD, with 128mb of ram, and atleast 8GB of Harddrive space.

Last but not least:

7. Smaller than the psp-2000

One console doing great does not mean another that's doing well is doomed. Besides, I think they are totally different markets. The DS is mostly for a younger crowed (I hear 70-80% are sold to kinds under the age of 16). The PSP is more adult oriented, with home brew, and movies.

Plus, there is nothing right now on the horizon that is better than the PSP at what it does. It still has a long life ahead of it.

I hope your being sarcastic with some of those features... :P 

30 million sales = YES.

But, Sony needs major 3rd party support to combat the DS. Pure technology won't help, since the PSP is stronger than the DS in that regard. Sony will need to work hard to reduce development costs, add UI features to stave off PS2 ports, and figure out how to handle the homebrew audience. "Hackerproof" the PSP2? Encourage development of home games? Anything better than what they have now.