Unless people stop using smartphones/tablets, it's never going to reverse. 

Everytime I go into a Best Buy there's 3-4x more kids around the iPad section than there is in the 3DS section.

When I'm at an airport I see 4-5x more kids playing on their own/or their parents tablet/phone than I do them playing a DS/3DS/PSP/Vita. 

The world has changed.

Unfortunately for Nintendo this is hitting them very hard. 

Smartphones/tablets are dominating in areas Nintendo was relying upon to differeniate themselves from Sony/MS. Cute/colorful games (Angry Birds, Plants Vs. Zombies), easy to play arcade style games (Candy Crush Saga, Flappy Bird, Cut the Rope), and casual games (a billion different Brain Training knock offs, pet sims, etc.) are absolutely the types of games people love to play on mobile (not Call of Duty or Halo). It's one of the reasons Nintendo is under so much pressure from investors to make mobile games, because investors see the similarities there.

Even Nintendo's foray into Quality of Life products might find itself under pre-emptive assault here, as Apple, Samsung and others are readying huge product launches into the health/wellness sector. Apple recently hired a bunch of health gurus and Nike employees. 

A smartphone/tablet is not a fad device, it's a life changing device that every household will have going forward, just like the home telephone, television, VCR/DVD/Blu-Ray player, PC/laptop. 

Now that we have confirmation of 3DS/Vita numbers (151k for 3DS, 24k for Vita), here's a look at how Nintendo's primary handheld has performed since around the time of the iPad launch and the boom of the smartphone gaming era (Angry Birds)

Feb 2010 (DS): 613k
Feb 2011 (DS): 456k

Feb 2012 (3DS): 262k
Feb 2013 (3DS): 183k
Feb 2014 (3DS): 151k

In 4 years ... that's an unbelievable drop off, especially factoring that the last 12 months have been one of Nintendo's best years for handheld game releases -- Fire Emblem, Luigi's Mansion 2, LEGO City, Mario & Luigi, Pokemon X/Y, Animal Crossing, Art Academy, Brain Training, Monster Hunter 3 Ultimate, Zelda: A Link Between Worlds, SMTIV, and Bravely Default.

I agree with this, but I don't think it is a doomed, it just got smaller.

The casuals left, the Nintendogs, Brain Age people, the people who bought a Game Boy in the 90s to play Tetris, they left for cell phones. Now handhelds aren't any more casual than a home console. Actually, it is the home of Niche games, turn based strategy, dungeon crawlers, japanese rpgs, you have the high budget games in home consoles, and the low budget ones in handhelds.

150 million sales are not possible anymore. But we are left with something that will still sell quite a lot more than Super Nintendo. Even if 3DS sells only 65 million units, that is a nice userbase to sell software to. And in software sales, the 3DS is still selling more every year.

Nintendo still owes us a 2D Metroid, a Wario Land platformer, a third Pokemon, an Advance Wars game, and I hope Konami makes another Metroidvania Castlevania.

Here's another post from NeoGaf:

http://www.neogaf.com/forum/showpost.php?p=104380398&postcount=2821

Courtest of kswiston:

Hardware Shipment Numbers to the Americas

GBA
FY 2002 - 7,570,000
FY 2003 - 7,800,000
FY 2004 - 9,450,000
TOTAL = 24,820,000

3DS
FY 2011 - 1,320,000 (launch shipment)
FY 2012 - 4,670,000
FY 2013 - 4,270,000
FY 2014 - 4,100,000
TOTAL = 14,360,000

It's not even close. Software sales are even more embarrassing. GBA's FY 2005 software shipments were only a few million lower than 3DS's LTD software shipments in the Americas.

GBA absolutely eating the 3DS for lunch. Granted comparing to the DS may just be unfair, but the 3DS is so far behind the GBA here. 

Last gen was an anomaly. It was the first gen that brought in casuals, and they left right after that. DS catered to people originally not interested in gaming by offering experiences that don't have much to do with gaming itself (Brain Age, Big Brain Academy, Personal Trainer:Cooking and countless Travel Guides and Dictionaries). These applications are now, well, apps on smartphones. The PSP catered to people that wanted a media player on the go, which is also a segment taken away by smartphones.

Compared to the GB or GBA generations (4th and 6th respectively), this one doesn't look THAT bad. Basically, the market reverted back to the pre-casuals state of the 90's/early 2000's.

This was pretty obvious stuff. All the signs were there that this was going to happen. The sheer range of gaming experiences available on mobile now completely dwarfs that of dedicated handhelds.

GBA absolutely was destroying these 3DS numbers so that doesn't hold up either (see above). You'd probably have to go back to pre-Pokemon/GBC launch (1998) to get even numbers. 

It's no wonder Nintendo is in a rush to start branching out into other businesses (QoL, licensing, etc.). 3DS absolutely cannot carry the company and Wii U is a full on disaster. 

you all forget 3DS launched at 250$?
DOUBLE the price of GBA
i agree somewhat on the lackluster SW sales.
HW will be comparable to GBA which was a much more kid friendly kinda toy-ish, and a lot cheaper too...its pretty good to me

Software comparision from kswiston:

http://www.neogaf.com/forum/showpost.php?p=104385195&postcount=2843

Here are software sales just for fun


Software Shipments to the Americas

GBA
FY 2002 - 23,380,000
FY 2003 - 30,660,000
FY 2004 - 42,430,000
TOTAL = 96,470,000

3DS
FY 2011 - 3,940,000 (launch)
FY 2012 - 12,640,000
FY 2013 - 16,170,000
FY 2014 - 19,700,000
TOTAL = 52,450,000

When people think Nintendo can ride out this gen like the GCN generation, they're really ill-informed about how well the GBA really was doing. 

Perhaps Nintendo should try a "Nintendo Entertainment Tablet" approach with next handheld. Be the cheapest tablet you can give your kids (obviously with buttons and dpad)