There should be IMO, i think it would be awesome. You could link it with your xbox live account and get achievements on the go etc.+ wifi and 3g. It would be a huge success, so why isnt there one? I mean one like the ps vita/ 3ds that looks something like this:

or this

or better yet this

Windows 7 phone...?

But that isnt a ps vita/ 3ds kind of thing, is it? I mean a handheld device that is specifically for the handheld gaming market and has its own games such as psv + 3ds. 

because the market is dominated by nintendo. sony had to learn this - possibly vita can become a success. but especially vita will have to survive the market while smartphones get more and more powerful - both processor and graphics.
 i don't want to see the market for mobile gaming consoles fading but in my opinion sony has to push the vita *a lot* to make it stand up against the mass of competitors. the 3ds is another story - it is not high-tech hardware and never wanted to be. it sells because of (nintendo) games and obviously, this strategy was, is and will be nintendo's key to success.

I think walsufnir got it spot on, Nintendo is dominating too much, maybe when Microsoft dominates the  console business, they will launch a handheld when they are confident enough (Nintendo and Sony both launched their first handhelds when they dominated the console war)

WP7 is the best your gonna get.

MS is smart enough to focus resources on consoles and not touch a market that only Nintendo owns.

Cause dedicated gaming handhelds business in 2011 does not generate the profits Microsoft is looking for in 2011.
Why do you think they got out of the Zune mp3 player market completely? They are not a hardware company.

Microsoft will be come a telecommunication company in the next 5 years. I see massive wifi networks, Skype integration in everything in their future...

First: Microsoft is also a hardware company. They sold and sell controllers, keyboards, mice and webcams for computers since many, many years. They even build quite good peripherals, if you ask me. So they are not "not a hardware company". And don't forget kinect.

Sure the most money they earn is from software.

I highly doubt the will become a telecommunication company - they will continue developing new windows versions and reach new markets with the arm-version of windows 8. Communication-services (or better: network services) *can* become an additional option of income.

Im talking about something like this:

or 

or

that last one was a joke btw...