1. Location of use:

Anywhere you would want to/can use a handheld gaming device you can use a portable tablet, smartphone or media player.

2. Competition for space:

You have limited pocket space, purse space available to carry devices around with you. If you have one device which can do both jobs adequately then why carry both? Do you wear a watch when you can tell the time on your phone? Also why carry two chargers when the one charger fits for both tasks?

3. Cost of games:

If you want to play something like Soduku to pass the time, do you want to buy it on your DS for $10-20 or iPhone for $1? There are plenty of old portable mainstays like Tetris which sold millions of Gameboys for instance which you can get for a few bucks each. Just because they are old or simple doesn't make them less relevant, see the time spent playing Solitaire to this day for instance.

4. Level of attention:

The average person with a smartphone already devotes significant attention to it. The phone itself can be just as likely to already be in your hand or close at hand.

5. Cost of the machines:

You can pay S179 + $20 for an iTouch and get between 10-20 decent games for it. The average person cannot walk out of the shop paying as little for a 3DS and get similar gameplay time.

6. Theres an App for that:

The utility of the other features are much higher, you have a better browser, media player and a variety of other functional utilities which you cannot get for handheld consoles.

If you're an avid game player then you probably won't care. However you ought to consider the original market for the Gameboy and the basic games which Nintendo sold to good effect on the DS as well. The core won't be catered for but the wider market can and will be. You can get an iTouch for your son or yourself instead of a 3DS and consider it to be a substitute. You wouldn't buy a laptop computer for $799 and say that it is somehow equivalent to a $299 Xbox 360 with Kinect for instance, even excluding price.

Nintendo could have done better, yes. I haven't denied their responsibility for some of their performance. It was quite likely that they didn't expect the level of success that they earnt with the Wii and of course in hindsight they didn't know that the Wii would be sold out for years and the average market price people were willing to pay was $299 when they were targetting for $199 with backwards compatibility which in the end likely did about nothing for their overall sales.

When you're at 100% of the market with the GBA or 70% with the DS it is extremely hard to go anywhere but down in terms of market share. One company cannot be everything to everyone all the time. It is hard to point to one action alone or even a group of them and say that in an ideal world had they done X and Y and Z differently they'd have ended up with a better result. Luck and timing both have significant roles to play, sometimes it is because the competitors action or inaction and others you just have the right product at the right time and ride a wave of popularity.

The market is just different now. It used to be if you wanted to play games on the move you had about one viable choice, Nintendo. Now you can choose between Nintendo, Sony and Apple with the possibility of more competitors becoming viable between Android and Windows 8 phone/tablets. The only time you can really claim 100% responsibility was when Nintendo had 100% of the market, then and only then do their actions dictate the overall direction and sales they can achieve.

Core gamers don't understand what 'good enough' means. If you're a core gamer you're far more likely to have more than one system and the fact one device can do an adequate job in one area doesn't mean anything because you also bought the device which is more than adequate there as well to compliment the overall experience. It never mattered to the 30 million Call of Duty players that the PC was the best way to play that game because keyboard and mouse was the best interface for shooters, analogue sticks and 640P graphics were 'good enough'. For the mass market, 'good enough' is the enemy of specialised devices.