Nintendo has already stated that they will not be simply porting existing games to smartphones.  They will be creating new IPs designed for smartphones, like Miitomo.  Like you, they too see the need to differentiate their mobile, handheld, and console ecosystems.  It's not unreasonable to suspect that they will be bringing existing IP to smartphones, but they at least know of the need to differentiate the experience.

What can't a cheap tablet do?  Play Pokemon, Smash Bros., Zelda, Animal Crossing, etc.  The appeal of Nintendo systems is not its hardware, but its software.  Making the handheld more expensive will not give the system more titles like this, nor help it differentiate itself from tablets.  It will only cause less people to buy it.

As for the handheld being of capable of console quality graphics, that has the issue of now making it difficult to differentiate between the handheld and console.  And please don't start with the Android idea.

Their is no "co-existence" with mobile. Mobile is like a cancer, you can't "co-exist" with a cancer. Mobile is more dangerous than Sony/MS ever were to Nintendo because mobile undermines the very tenants of Nintendo's basic business model (you pay $170-$250 for a machine and then you pay us $30-$60 for a game for the next five years and we collect $10 royalty on every third party game). 

Even Iwata said this before he passed away, that Sony/MS share the same basic fundamentals of the business, but mobile companies did not and that basically was a big problem for Nintendo. 

Nintendo IMO realized this a long time ago, but the fan base needs to understand this too. There's this tendancy to kinda not take mobile seriously because well the games aren't serious and surely people won't be entertained by that next to the awesome power of being able to play Xenoblade X on NEW 3DS ... except ... that I see it every day in my work, having to travel, I see grown, mature women who probably would never touch even Playstation with 50 foot pole entranced in Candy Crush or Words With Friends or whatever. Four hours on end. And kids? Forget it man. Forget it. I see about 10-20 kids gaming on a damn smart device versus a 3DS in any given airport, North America or Europe it doesn't matter. Even in Japan, traditional gaming devices are definitely getting outgunned. 

Wii remote WAS the Wii ... it would not have been successful without that controller, I don't really see how you can make a sensible argument around that. Even the whole "Wii U is waay too expensive and Wii was cheap, that's the difference" ... not really. Wii's $250 price point where it sold for years at, is equivalent to $294 today with inflation ... which is basically the same price as a Wii U. Why the huge difference in sales? 

Let's be real nintendoes what others don't. Good luck predicting them. Yes it will be better than vita because the always out do the hh competition. And yes it will be sturdy cheap parts.

Fundamentally though if all it takes to sell hardware is "Pokemon, Smash Brothers, Zelda, Animal Crossing" ... well then every Nintendo platform should be successful because every Nintendo system has those games as exclusive for the last 20-30 years. 

Obviously the business is more complicated (far moreso these days) than just that. 

Even the price issue. The 2DS can be had for $99 these days, why isn't the 2DS breaking sales records? It MORE Nintendo IP than every Nintendo portable before it (DS didn't have Smash Bros or Kid Icarus or several others). The Wii U is the same price inflation adjusted as the Wii was for the first half of its life cycle and even includes two free games versus just one for the OG Wii. Shouldn't sales be like remotely close?

There's also a fundamental misread of what entails "cheap" parts. The PS4 is a "cheap" console. The only remarkable thing about it is the 8GB of GDDR5 RAM that they chose, but even that they chose is smartly because they knew the price of GDDR5 RAM would scale down quickly in cost because every major graphics card will be using that RAM for the next couple of years. 

"Cheap" doesn't have to mean "crap hardware". Nintendo's lazy hardware policies post Yamauchi and insistence on weird "our way or the high way" propietary hardware has gotten them in trouble. They have made perfectly powerful hardware like the Super NES and N64 and the GameCube in the past for affordable prices (which is all that Sony does today) too. 

there will always be that certain range in age where kids don't need a phone but like the idea of a portable machine that has good games. Plus you will always have the loyal Nintendo fans . I don't see Nintendo having a problem making profit any time soon

If it was just phones, Nintendo would be pretty insulated. 

Even if it had just stopped with the iPad as a luxury item device ok. 

But today snot-nosed little kids have their own full-on Android tablet that costs less than a 3DS and plays cartoons, runs their damn One Direction music videos, browses the internet well, and play thousands of free games with a decent HD display in the 7-inch range.

Next time you are in an airport really look around you and count how many kids you see with a 3DS versus those playing away on a smart device. 

I had a funny exchange with a little girl across the aisle from me, she was playing some game on her tablet (her sister also had her own tablet), and I pulled out my 3DS, as it was going to be a long flight, and she just shot me this "what the *fuck* is that thing? Don't you know they invented tablets already?" look, haha. I couldn't help but laugh. 

Yes good point Soundwave. I guess touchscreen is enough for casual gamers. I think your right Nintendo will have mostly hardcore gamers after tablets and mobile eats up casual gamers

"Nothing can coexist with mobile", that is such an ignorant statement that I can't even comprehend how to respond to that. I bet in 2008/2009 u thought the "casual" market would be Nintendo's forever, guess what? The world is constantly changing and to think a device or company will reign supreme forever is very naive and demonstrates sheep mentality where u just jump on the bandwagon for whatever is popular at that point in time.

I absolutely do take mobile seriously and have defended it against people on this site who bash it just because it doesn't appeal to them, I play mobile games often and find many of them to be completely enjoyable experiences. Of course I don't think games like Xenoblade which are extremely niche will do any good with these type of audiences, I'm talking about games that can blur the lines between what a mobile game is and what a console game is, a middle ground that can appeal to both sides of the spectrum. Nobody in the industry is or has really tried to do such a thing and I strongly feel there is potential. I think microconsoles/streaming boxes like Apple TV/Fire TV can potentially offer something like this but they aren't quite there yet and pretty much just offer mobile games that people would rather play on mobile devices. Since these devices have not yet capitalized on this, Nintendo has a shot to make this there market.

Stop singling out price when i have repeatedly listed a combination of factors working together that contributed to Wii's success. Wii Remote would have been nothing if Wii did not have strong and effectie marketing, a price point that was affordable for the mass market and compelling software that make good use of the remote. If Wii was $400-500, lacked games that made use of the controller and had lackluster marketing than it would have failed. Wii U's problem is not price in and of itself, u have said urself that Wii U has about a dozen major problems that combined have caused it to sell the way it has, if Wii U didn't have all those problems than price wouldn't be much of an issue but since it does have several problems, it causes Wii U to be over priced for what it offers.

3DS has very weak hardware, I dont think next Nintendo handheld needs 720p resolution (especially 1080p), 540p would be enuf, Vita has same resolution and has great picture. 1GB definatly and same quad ARM CPU.

I personally don't think they can co-exist with mobile, because mobile undermines the very nature of traditional game platforms. Trying to be chummy-chums with that market isn't going to work. I know you don't want to admit this, because it raises some disturbing question marks, but I honestly believe it's the truth, and I think even Nintendo understands this better than a lot of their fans do. 

I don't really buy that marketing plays that big of a role if your product isn't truly compelling in some way. I've never seen a product in the traditional console space become hugely successful just because "marketing" alone. Sure marketing helps, but the product itself must be something that people look at and go "wow!". Nintendo could market the Wii U double the Wii ... I gauruntee you it would not sell even 1/3 of what the Wii did. 

Besides if Nintendo IS making mobile games, and these mobile games will presumably attract women/casuals and whatever ... then what exactly is the point of having a separate DEDICATED game machine for such experiences and thinking you can then get those people to pay $40 for a game instead of free? 

This is just an arguement Nintendo is never going to win. Mobile poisoned the well for this audience by getting them used to free games. Once you get something for free it's very hard/impossible to get used to paying a large amount of money for it. Make money off casuals with mobile games. Focus your *core* products elsewhere, otherwise what's the point of a dedicated game platform?

And there were many people that payed $400-$500 for a Wii circa 2006/07 ... I know this because my brother sold like 10 of them at that price on eBay (not that I condone price gouging/product hoarding, and I did let my brother know about it, but whatever). I was offered $350+ for my Wii several times too. It's not price that's the trick, it's making a product that illicts the response of "I NEED THAT in the my life". That is where Nintendo has failed in the 5 years, this also I understand difficult for Nintendo fans to understand because they make wonderful games and surely it should be easy to sell anyone a Nintendo product. It must be the price or marketing and if they just fix that a little it'll all be fine. I love Nintendo, but I feel very, very strongly this isn't the reality of the market, this market is cold, and ruthless, and if Nintendo does not wake up and smell that it's 2016 they are going to get their ass beat. Bad. I wish it wasn't like this but it is. 

All game consoles/handhelds are relatively cheap, it ain't like only rich snobs are buying a PS4. It's college students that eat Macaroni and Cheese and nothing but for dinner every day, it's households in a run down neighborhood pulling in only $40k a year. Thinking Nintendo exists in some market and Sony/MS are making alien, high luxury devices is a mistake. Playstation IS about as mainstream and (yes) kid-popular as you are going to get (it's *precisely* because they make games that shouldn't be played by boys that boys go *crazy* for it). It's time to also understand that reality. The Playstation 4 IS the modern NES ... Nintendo is the one by virtue of niche decision making that has turned themselves into the Sega Master System.