To be honest Nintendo could have several competetive advantages going this route.

All tablet makers have to make all their money back from the tablet itself.

But Nintendo being a game maker could sell the tablet at/near cost, thus having far better hardware or being able to sell a tablet with specs that no one else can really match.

IE: They could theoretically offer a $300 "game tablet handheld" that has a better chipset than $700 iPad for example.

Secondly, which mainstream company has a tablet-style device with physical gaming controls on it? Cheap Korean companies that can't even get distribution in most major US retailers don't count.

No it won't beat the iPad in sales. But it could beat a lot of tablets in price to performance ratio, and also have the benefit of being the best portable gaming device for everyone as it could have both the simple iOS/Android style games but also all the exclusive Nintendo games.

If I'm choosing between a $400 Android tablet next to a $250-$300 Nintendo one ... I'd probably take the Nintendo one to be honest. Why should I pay more for less features? In this case, Nintendo would have a competitive advantage.

Well a tablet has basically little to no physical inputs on the base product along bigger touch screen. If you are talkine about a single screen device like the previous Game Boy line or Sony's PSP/VITA and most handles throughout the history of the industry, just because they may or may not have a touch screen doesn't make them a tablet.

A cell phone isn't a tablet despite devices like the Galaxy Note and increased sharing of OS and features blurring the lines, due to functions. Tablets don't make calls and a MP3 device that touch controls isn't the same as tablet either. A Nintendo device to be considered a tablet would have to have tablet functions, increased screen size (the Gamepad's screen size at minimum) and a distinct lack of physical inputs like analog control and face buttons. Otherwise it is just another handheld 'Brick' device and not at tablet. It might be semantics but it is just how I see it.

This is a JXD Game Pad 2 ... what is it? Tablet? Game Handheld? It's both (and yes, it runs Android):

Can it really compete with apple and Samsung i doubt it

Well the way I see it they're in competetion with Apple and Samsung whether they want to be or not. When someone jumps you from behind and starts punching you in the back of the head ... you're in a fight, whether your want to be or not. 

They won't beat Apple, but a high tide raises all ships. Smart devices sell hundreds of millions/year, even if you're no.4 or 5 on that list, odds are you're shipping at least 15-20 million units a year which Nintendo hasn't sniffed since the days of the DS. 

Besides to be honest as a parent, if there is this hypothetical Nintendo tablet for $250 (remember Nintendo can sell on the razor blade model of making money off the games rather than hardware) versus a $500 iPad ... odds are I might as a parent get the Nintendo one for my kids. Not only can they play all the Angry Birds crap they want, but they can have Mario and friends there too? 

For half the price? Yeah I think that'd be a decent option to a lot of people honestly. 

Also it doesn't have to be a tablet full on, it can still be a gaming handheld device, just one tailored more towards what modern audiences expect from an portable electronics device. It's not 1989 or even 2004 anymore, times have changed massively and so must Nintendo. 

Well the way I see it they're in competetion with Apple and Samsung whether they want to be or not. When someone jumps you from behind and starts punching you in the back of the head ... you're in a fight, whether you want to be or not. 

They won't beat Apple, but a high tide raises all ships. Smart devices sell hundreds of millions/year, even if you're no.4 or 5 on that list, odds are you're shipping at least 15-20 million units a year which Nintendo hasn't sniffed since the days of the DS. 

Besides to be honest as a parent, if there is this hypothetical Nintendo tablet for $250 (remember Nintendo can sell on the razor blade model of making money off the games rather than hardware) versus a $500 iPad ... odds are I might as a parent get the Nintendo one for my kids. Not only can they play all the Angry Birds crap they want, but they can have Mario and friends there too? 

For half the price? Yeah I think that'd be a decent option to a lot of people honestly. 

Also it doesn't have to be a tablet full on, it can still be a gaming handheld device, just one tailored more towards what modern audiences expect from an portable electronics device. It's not 1989 or even 2004 anymore, times have changed massively and so must Nintendo. 

Except they are