Nintendo has always used technological innovations to improve its devices: Touch on the DS, motion sensors on Wii and now 3D on the 3DS and face recognition for stable 3D. Going by Nintendo's history to use cheap technology in new ways should be a safe way to predict their next steps. What's really hot right now are sensors. Blood pressure, pulse, hydration, etc. Starting 2015 there will be a plethora of smart watches that use all kinds of sensors and I fully expect them to integrate some of these into their next consoles.

As for design, does anyone remember the PSP Go? Imagine a dual screen handheld with a slide-open mechanic. That way the top screen is always exposed. You could use that handheld in one-hand mode like a smartphone, in landscape mode without buttons (again, like a smartphone) or slide it open to use it in dual screen mode. Sensors will be used to make games swap between different modes on the fly. For instance you could play Pokemon in one-handed mode on a bus, then turn the handheld into landscape and play with two hands when you find a seat. Once you return home you slide the console open and continue playing with buttons and a second screen. The easy of a smartphone with the precision control of a traditional handheld. Backwards compatibility is still possible and people don't need to be ashamed of being seen playing a handheld in public.

I am guessing it will be something none of us expects :).

This isnt such a bad idea at all actually... I like it! But Im not sure MOST people would appreciate it though; it didnt to wonders for PSP Go. I think they need to find a way combat smart devices and expand the market

Thanks! I think it was not the design that stopped the PSP Go from becoming a success but the download-only format.  The biggest hurlde for such a device would be ease of use. They'd need to find a way to make the sliding mechanism natural and easy to understand for the customer. And it wouldn't be a very powerful machine. A 480p screen and a CPU that's slightly faster than the Vita's to keep the device thin enough to hold comfortably in one hand and to stop costs from exploding. I'm pretty darn sure Nintendo will use a 480p screen for its next handheld anyway. They had some huge problems with HD development on Wii U and I'm sure they'll rather use a lower-resolution screen to keep costs down.

The device I described would make it very easy to port smartphone games and lots of Nintendo franchises would benefit from it. Pokemon is easily playable with one hand and a touch menu in battles. Advance Wars and Fire Emblem as well - just rotate the handheld whenever you need to. Wario Ware, Nintendogs, even Mario Kart with an easy one-handed mode where opponents are weaker would work really well. 

Yeah, I'm just way too deep into this right now, haha! 

I want to make phone calls on it.

Nintendo usually goes for cheap with screen resolution but I think this time there will be some concessions here.

I suspect they'll go with a 1280x720 (HD) screen of reasonable quality (ie: better quality than the washed out Wii U displays). Not all content has to be at that resolution mind you, some games could run at 540p or even 480p just fine.

But in this day and age of iPads and iPhones with super high resolutions and 1080p screens becoming the bottom end, I think even for Nintendo I think they recognize their devices look seriously dated even to kids. Apple and Samsung's displays are so much more better looking and vibrant that a 480p screen or something will laughed off from day 1. 

A decent 1280x720 LCD that's say 5 to 7 inches (depending on form factor, are they going more mini-tablet or not) will look nice but still be quite cheap come 2016 and a good mobile CPU/GPU should have no problems driving the display.

I have a cheap $160 Samsung tablet and the 8-inch 1280x720 display (far from cutting edge) is light years better looking than a 3DS or Wii U screen. 

Better storage
Wireless AC instead of N
High bandwidth interface to the home console edition + better integration +cross play
Screen resolution as good as that of the Wii u tablet today (shouldnt be a problem since most low end phones can do this)
Haptic touch functionality
Better online infrastructure
Release it at $199 or below

Yeah it would be cool if you could play certain games or certain sections with just one hand!

HD screen is almost all I care about. After that it's better battery life and I guess a second stick. But mostly just the screen.

It will use standard controls as part of their concessions to 3rd party publishers. I'm thinking it will use the clam shell design with the screen taking 99% off the space thanks to the Sharp partnership. There will be holes in the screen where the speakers underneath will project the game music and it will be able to make phone calls. It will replace almost every cell phone in Japan. It will also feature a screen at a resolution between 480p and 720p. I'm not sure they will try to push for 720p.