The specs of an iPod touch 6th gen ($199... and Apple doesn't sell anything with good profits) but with better battery life or an Xperia Z1 or Z3 compact (also available for $200 - $250) would be a good starting point: http://www.gizmag.com/ipod-touch-6g-vs-5g/38521/

Perhaps even the power of  an LG flex 2 ($250 - $300) or an Xperia Z5 compact (a bit pricier)

• 1136 x 640 pixels (or something similar from 540p to 720p)
• 1 - 2 GB RAM
• 16 GB flash memory, expandable with MicroSD-cards
• 64bit-SoC with the power of an Apple A8 or Snapdragon 801
• one or two screens with 4 - 5 inch (screen size of the XL models is great, but the device has to lose some weight)
• battery 2.500 - 3.000 mAh (the new 3DS XL still gets away with 1.350 mAh

New Nintendo handheld leaked!

It will run windows xp

Even with cost breakdowns, a modern iPhone (which mind you also has the extra expense of the cellular components) only comes out to about $220 or so to manufacture and keep in mind they are using fairly high end glass/metals and a ridiculously high resolution display which Nintendo wouldn't need. 

The iPhone 6s chipset which is light years more powerful than a 3DS (or Vita) costs like 30-35 bucks. You could put that processor into a $150 portable if you really wanted to. 

As many have said, I feel as though the next handheld ( even if it is a fusion device or whatnot) has to be cheap enough and entice people from the outset. But it should look noticeably better than the 3DS though. But it doesn't have to push the "HD look" of the Vita really, since there will be no competitor in the dedicated HH space next time.

It's just going to be an impossible battle to tear people away from their smartphones but at least Nintendo can hope to carry their audience over from the 3DS and grab a couple of new people.

To be honest though what's likely to sell more in the long run ...

1.) Cheap handheld, only about Vita quality graphics, sub-HD screen. Standard Nintendo price $199.99.

2.) Higher end portable. High end chipset, so much so that it can play ALL main Nintendo titles (no "little brother" Mario 3D Land, but all the real Nintendo IP including Splatoon 2, Mario Kart 9, Zelda NX, etc.). Can stream games to the TV or even a nearby tablet, so basically it can act like a mobile console. $229.99 or so but with sensible parts deals can scale down in cost to $199.99 after about a year. 

Yes, $30 is a huuuuuuuge difference in hardware budget. In mobile prices that means a massively more powerful processor.

I would advocate for no.2. Nintendo needs a product that genuinely stands out from cheap mobile tablets but is still affordable.

Also the notion of cheap = garbage hardware is well ... garbage. Nintendo has made many game systems that were cheap AND powerful. GameCube. Nintendo 64. Super Nintendo. Even the NES for its time was quite powerful for a home product circa 1983 (sure as hell blew the doors off an Atari 2600 which was the standard console of the time).

Nintendo needs to stop perpetuating this myth that you can't possibly make good hardware and sell it at a reasonable price. That's bull shit. Stop with the stupid expensive hardware gimmicks, stop letting the weird design niches of your developers take precedent on hardware design (Yamauchi never did this, Iwata let it get out of control). Enough with Nintendo's designers + Miyamoto running Nintendo's division like a bunch of kids in a candy store hoping to strike it rich with gimmick no.3948 and they need some weird exotic RAM only made by one supplier in the world. Enough. Get your freaking hardware division in line and slap some sense into them.

an Oled screen would be nice hehe. Maybe eventually

Its actually more important Nintendo focus on low price then high end specs.

Vita wanted to bring console style gaming to handheld gaming and it failed. 3DS owners are primarily buying titles that differ greatly than what's successful on home consoles.

More powerful than what? 3DS? Commodore64? Next gen phones will be much stronger than snapdragon (duh). Phone tech evolves fast. Signs of a competitive market.

I'm not really that bothered by the screen's resolution for the NX handheld. Wii U's Gamepad has a 480p-6.2" screen and games on it look gorgeous, so if Nintendo decides to go with a 480 or 540p on a 4 or 5"(max) screen on the handheld, it wouldn't be a big problem.

Their New 3DS already has a Quad Core ARM chip, so it would be very surprising if they don't go with something better than that for its new device. With that I don't mean going with an 8-core processor but with a better and probably faster 4-core one.

The GPU part can be tricky. If Nintendo wants to have a "unified ecosystem" between the home and handheld devices, sharing something more than the OS and Account System would be interesting, and since going for an x86 processor wouldn't be good for a handheld (they are too power hungry compared to an ARM processor), sharing the GPU architecture would be their best option. Given that AMD will likely be in charge of the hardware of the home console and knowing that they are working on an APU with an ARM processor, it's not too far fetched to believe in Nintendo doing exactly this.

I hope Nintendo goes with 2GB of RAM, but I don't think they'll go with more than 1GB. Even the improved New 3DS has only 256MB plus another 10MB of VRAM!

Battery life is something that has to be improved. Period. The autonomy of a handheld should be more than a couple of hours.