Sony won't go into it again for sure but Nintendo will have to come up with a new handheld idea that distincts itself from mobile gaming if it has a future in the handheld market

Against another portable, maybe.
Financial aspect? I don't consider a victory when you have to do a big price cut just months after release.

Even if your net profits have increased massively because of it? Imagine the losses Nintendo would have had over the last few years without the 3DS and its software selling amazingly. Within less than a year after the price-cut the 3DS was making profits per system, and the bulk of the systems sold were after this. Additionally, the dozens of multimillion sellers on the platform have greatly bolstered profits (software is where most profits come from.) 

Handhelds are much more profitable than home-consoles. It is why Nintendo is able to remain profitable even when their home platforms have losses (Gamecube, Wii U.) If anything is going to die, it is console gaming. It has become so costly with very little returns. Publishers can't increase prices on their software, because the demand is very elastic, but with inflation and rising development costs the returns are less. The only thing saving profitability are digital sales, but that is a band-aid on a bleeding wound. 

The price drop doesn't really matter assuming the 3DS is still very profitable for NIntendo.

android / iOS already won.

Yes Apple iphone, but that's prob the only one that could.

Yes and comparing console games sales to Steam sales is incredibly valid, so thank you for your support :D.   The fact is that the handheld market is now ~92% on Phones, so ignoring it is possibly the most idiotic thing one could do while talking about portable gaming.

Last Gen was inflated for sure, but you can't argue that this gen for handhelds is healthy at all. Forget the DS, even Gameboy sold > 100m, half that is the worst a Nintendo handheld has ever done.

The market is collapsing, it will become niche at best.

Those who don't see mobile gaming as a threat don't truly understand it. Phones are like PCs, especially when compared to handhelds, since no one else can break into this market that Nintendo has created and monopolized.

Phones completely dwarf the 3DS in power, and by the time NX comes out if it even has a portable component that will be outdated upon release.

And if consoles are slowly losing space to PC's, handhelds have been quickly losing space to mobile, even with the quality problem. To believe anything else is to miss the forest for the ferns at the bases of the trees.

The allegation that mobile games have no quality is just the same thing as claiming steam is only full of indie games. It simply has a quality control problem, but publishers realize that there is a ton more money to be made on mobile than on handheld, so its simply a matter of curation and vending.

And its not even a legitmate defense to be honest, because game quality is subjective and irrelevant, fact is they get downloads, make money, and have a market. It's entirely possible that people will simply change the games they want to play. Consider this, Vita advertized console gaming on handheld, look how well that worked out

it also had more 3rd party developers then the 3DS, its naive to think all of those developers will just ignore smart phones.

That's an easy fight to win. I want to see them succeed up against smartphones though.

The 7th gen saw over 230 million handhelds sold.

This generation is on track for around 80 million when all is said and done.

That's a decrease of over 65% from one generation to the next. That's not a decline, that's a collapse.