If the time of the game console is not yet at an end (handheld or otherwise), then Nintendo has a lot of work to do. It needs to get better at all of the game-related things that iOS is good at. It needs to produce software that clearly demonstrates the value of its hardware—or, if that’s not possible, then it needs to make new hardware…
…Nintendo needs to do what Nintendo does best: create amazing combinations of hardware and software. That’s what has saved the company in the past, and it’s the only thing that will ensure its future.
I agree with Siracusa; Daring Fireball’s John Gruber and others that disagree I think are missing the potential of the current market. We may be clearly moving in the direction of multi functional platforms that can do more than play games. But, as Siracusa points out, as long as there’s a strong market for dedicated gaming devices that offer a richer, more immersive experience (I think next-gen console sales will reflect this), Nintendo still has a shot with its hardware and software combination.