Other games would be Labo and 1-2 Switch.But yeah, there wouldnt be many.But its still a bad decision, especially since MP sold 5.3 million and Lets go did 10 million.

But no, joycons are not the only reason, though they are a big and important one.Nintendo would have to waste money on R&D, people might not like it, you could potentially confuse people about what the Switch is.You would need to spend more on marketing, since you would be selling two distinct products, even if they are from the same family.You would earn less money on games you invest like Mario Party and ARMS(since that game uses motion alot and is the prefered style to play it).And its not like Nintendo to not make more games like those.And the list goes on and on.

So will their be smaller joycons? If so will they be compatible with the switch I have now?

I may be proven wrong but i still say it's a bad idea.
Built in controllers means it's a 3DS part 2; smaller battery means people will complain… a LOT; smaller joy cons... i can't even imagine how that could be pratical.

Making a new Switch model that can't be used as the popular console will confuse people, will make it seem inferior.
As an exemple, Wii U also had a cheaper model, but seeing as it was inferior to the other version, nobody cared; PS3 also had a 20GB version at 500. Did people care? No. They only cared about the other, beefier, pricier version.

People don't mind paying a bit more to get the full experience.

First, obviously point of this revision would be to smaller and cheaper, so low price Switch offer, and biggest costs can be made buy making only handheld Switch with built in controls, selling it for $200.
Saying that, this kind of Switch maybe could still be connected to Dock, and have connection to Joy Cons or Pro Controler, if they are all bought seperate.

I just think it's against Nintendo's best interest to convolute their product line. One of the main reasons Switch is doing so well is because its approach and marketing are simple and well understood by consumers IMO.

Think of Japan though... 

Anywise, Joycons are the most expensive components of NS... 

Dock could be optional for further affordability but for sure it souldn't lack it as you aforementioned, switch that doesn't switch is not a Switch. 

If this is real - which I think it easily could be - it's presumably come about in no small part thanks to Switch's performance in Japan. From Nintendo's perspective, Switch hasn't quite solved the problem of reconciling a portable-centric Japanese market with a home console-centric Western market. Switch is trending behind both 3DS and DS in Japan and that'll be cause for concern for Nintendo, even if Western sales are trending ahead of 3DS. Given their stated ambition to sell multiple Switches to individual households, a cheaper model aimed primarily at Japan, families and children (in the West) makes sense. Pokemon Let's Go has under-performed in Japan, too, which might be another reason why Nintendo are now accelerating plans for a cheaper, mini model. With portable hits like Pokemon gen 8 and Animal Crossing coming this year, then Nintendo will clearly want to maximise their sales potential and to drive hardware sales even higher.

In practical terms, a portable only Switch would be problematic, given that would remove the Switch's defining feature. A Switch model without removable controllers would also be problematic - especially given Nintendo seem set to give Labo another push in 2019; the modular nature of Switch is essential to something like Labo. That being said, I think the second option is more likely than the first. Any model like that could be kept compatible with the docks (which are already available separately) and existing joycons and pro controllers and could fill the criteria Nintendo will want to hit: cheaper, more appealing to the portable-centric Japanese market; an option for families and Switch-owning households worldwide. I think, on the latter point, a Switch Mini had better be compatible with existing docks - but if shrinking the form factor is one goal, is that something that can be achieved? Additionally, Nintendo could encourage more peripheral sales of docks, joycons etc to people who buy this cheaper model.

It's an interesting report and a hardware revision is certainly an increasingly likely possibility. Switch is marching on to the 40 million mark in 2019 and let's not forget - PS4 saw its two hardware revisions launch during the third year on the market. The easier move for now would be to slash the price of the existing model before Animal Crossing and Pokemon hit, but Nikkei do have form for this kind of scoop. It's certainly going to be an interesting 2019 for Nintendo.

The console is small enough, hope they don't go to stupid small with it.

1) Of course Pokemon can sell well on a $300 hybrid platform, but it can also sell even better if it was also on an even more child friendly, $199-249 platform. This is a no brainer. Key word is "also", there can be more than 1 Switch model in the market.

2/3) You can't just magically make the Switch cheaper. The cost argument is not that small things are automatically cheap but that in tailoring towards a dedicated & accessible handheld factor they will cut costs such as screen production, IR scanner, two gyroscopes, 2 HD rumbles, 2 unnecessary bluetooth chips, 2 necessary batteries joycan controllers, an unnecessarily expensive form factor. Infact the Joycons are so expensive to produce they were reported to be sold at a loss during launch. Just like every Nintendo handheld before, I'm pretty sure they can reduce the size without increasing their costs. The Switch's specs even for a HH wasn't bleeding edge when it was released in 2017 and its certainly not in 2019. 

4) You're barely addressing the point of the child market, the market for multiple purchases per household.... and for adults I can assure you people are buying phones they can fit in their pocket, the Switch+cons is bigger than any commercially successful phone. There's also a reason every major manufacturer is selling a range of products including massive tablets, XL phones and the usual 5" phones. A "minority" is less than 50%, it doesn't equate to a non-profitable market.

5) What made you think I was intending to state that figure as fact, it was obvious hyperbole alluding to the fact that console makers have no issue selling additional controllers  & accessories especially on a Nintendo platform. 

6) You're welcome. All this boils down to is whether there is a market for a cheaper, more portable focused Switch and considering the 3DS is STILL selling well it just makes zero sense to think there isn't. It doesn't have to outsell the base console to be valid SKU option (Otherwise PS4 Pro, XB1X, New 3DS, 2DS etc wouldn't exist)