With the rise of smartphones and the gen over gen decline of handhelds, many people are claiming that the dedicated handheld market is doomed or dying. I'm not so sure I believe this.

Nintendo handhelds sales 4th+5th+6th generation (1989-2007)

Hardware-200.2 million, Software-878.52 million

Per generarion, this comes out to about 67 & 292 million respectively or roughly the amount that Nintendo 3DS is set to sell.

Each of these generations also had a few competitors that failed to gain any significant marketshare such as Atari Lynx, Turbo-Express, Sega Game Gear, Neo Geo Pocket, Wonderswan, N-Gage. Playstation Vita seems to fit the role as this generations version of those devices.

DS+PSP sold close to 240 million units of hardware and over 1.2 billion units of software, to me it seems as though the 7th generation was an outlier and shouldn't be what consider standard. So do u belive the handheld market is dying or has returned to normal?

this gen is definitely below expectations .. we will have to wait and see what happens next gen to draw a conclusion.

It's hard to say. I feel like we won't know how things will go until the end of the next handheld generation. But I do believe it's only a matter of time before dedicated handhelds are a thing of the past, and I hope Nintendo doesn't need a flop before it realizes that.

Much like dedicated gaming hardware (video game consoles) is still relevant despite the existence of gaming PC's, so shall dedicated handhelds be relevant despite mobile gaming.

We certainly need to see how handhelds fare next generation before we know for sure but I really find it interesting how this generation looks pretty standard when taking DS/PSP out of the equation.

What do u think about 3DS hardware/software selling about the average amount that pre-DS generations did? Is this simply a coincidence or could this be the baseline for Nintendo handhelds?

I generally agree that the 3DS's numbers aren't too far off from Nintendo's past handhelds if we look at the larger scheme of things. 

The softwares sales for last gen could have gotten sooooooooo much more, if the handheld didnt allow free donwload games, but the hardware might reduce a bit.

Well, the 3DS has reached 1/3 of the DS sales, while the PsVita has reached 1/8 of the PSP sales. Soooo i think that its all up to Nintendo next gen. Or if Sony makes a really powerful system then maybe.

When taking 7th Gen out of the equation, we are looking at 3DS/Vita doing similar numbers as handhelds in the 4th/5th/6th generations, do u see this continuing or are smartphones/tablets really killing dedicated handhelds?

I think it will! Since theres soooo much new technology coming out these days, it will be very hard to compete. And not only the next gen handhelds will evolve, but also the smartphones. Who knows what Apple could do in their next 2-3 phones that will blew everyones minds.