OK, now Nintendo has denied it. The rumors got the best of us....

http://www.gonintendo.com/?mode=viewstory&id=178555

Maybe, maybe not. Full of errors... does not means it's entirely wrong.

I still think it's coming... maybe not in this e3, but by Mario launch.

That's true, I was gonna come back and say that. It could be that they just got the dimensions wrong and had speculated on some of the details. We may just see it this E3 or may not. I know it will eventually happen (pretty much ever Nintendo handheld has eventually had a redesign/revamp) but the question is when.

Nintendo always denis rumours no matter how true they are.

I do recall them denying other things Nikkei got right. Not that we have to wait too long to find out!

I don't think they will announce a new model on E3, if they plan one. More likely they will do it with NSMB2 or so.

Well, the latest news stories suggest that Nintendo isn't working on a redesign, but in fact is working on the next system: http://news.cnet.com/8301-10797_3-57452328-235/miyamoto-were-on-to-the-3ds-successor/

But if you look back to the first rumors of a redesign way back when: http://www.engadget.com/2011/08/23/rumor-nintendo-working-on-3ds-redesign-10-joystick-add-on/

They said back then that there would likely be a name change and that the 3D would be downplayed. Well, this would be exactly the same thing as a "next system". So I think these are one and the same rumor, and it all makes sense. The redesign is the new system. I would say that the new system would probably be able to play DS and 3DS games as well as cartridges that are expanded for the new system. I would suspect that the functionality of the system would be expanded with more apps etc.