Look at how Nintendo’s portable line of consoles have gotten multiple SKUs and have been supported:
Game Boy Pocket
Game Boy Light
Game Boy Color
Game Boy Advance
Game Boy Advance SP
Game Boy Micro
New 3DS XL
New 2DS XL
Comments from Nintendo indicate that they are leaning in the direction of more SKUs than usual.
…In contrast, the number of form factors might increase. Currently, we can only provide two form factors because if we had three or four different architectures, we would face serious shortages of software on every platform…
They also subtly commented on an upcoming new version of Nintendo Switch that will be purchased by traditionally Nintendo handheld gamers.
…“It is Nintendo Switch, so maybe we’ll switch it up!” jokes Takahashi, responding to a question about whether Switch’s life cycle will resemble more the company’s TV consoles (completely new ideas at five-year-plus intervals) or its handhelds (subtler changes every few years). “Certainly, we’ve designed Nintendo Switch in a way that it can be used by consumers in the way that best suits them. I think we may see that people who have bought a Nintendo home console in the past traditionally, they may treat Switch like a home console and buy it and use it for a long period of time.”
“Whereas people who have been traditionally Nintendo handheld gamers, they may buy Nintendo Switch and then for example, if a new version were to come out later, then maybe they would decide to upgrade to that…
This comment also indicates that the current Nintendo Switch is their SKU for targeting home console gamers, where as the new version only targets handheld console gamers.
The areas where that focus can be better served are by making the Nintendo Switch more pocketable, lower priced, with better battery life and/or not require active cooling. The Mock-ups I made all focus on those points inspired by Nintendo’s comments.
Will they all happen? Maybe, Maybe not, but that is certainly the direction that Nintendo seems to be focused on right now. Nintendo knows that the 3DS will fade as Nintendo Switch grows, and they need to fill that lower price entry point to expand the platform significantly.
People hoping for some powered up SKU that has a bunch of games the original Nintendo Switch cannot run have not paid attention to Nintendo’s history with said revisions. Anytime Nintendo has made such SKUs (i.e. DSi and New 3DS) they have allowed developers to make games for them that do not run on the original models, and the amount of total software that actually forgoes the existing user base has been very very very few titles. It just does not make sense for the financial side of things for developers to cater a portion of the install base rather than the whole install base.
Will Nintendo make Nintendo Switch models with newer and better SOCs? Probably so, but the performance benefit will be marginal to non existent at best, as the focus will be to reduce cost of the total cost of materials (i.e. a 7nm SOC would allow them to put a smaller battery, reduce the entire chassis size, and remove the active cooling).
Nintendo is not focused on upgrading resolution of their consoles. They are still selling a 240p handheld console in 2018 at reduced costs with a very healthy profit margin on hardware and will continue that focus in the future.
In 2023, the Nintendo Switch will still have a 720p screen and Nintendo will be happy with the low cost and high profit margin and will have multiple SKUs.
Nintendo's focus is it leverage its software library to sell its hardware, and to reduce costs of hardware while addressing a wider audience. Focusing on CPU and GPU power and splitting their user base is not where they will expand and Nintendo knows this.