I concur with a lot of the comments suggesting that this article is incredibly biased. Overall, it reeks of the doomsaying I've mentioned before. Smartphones and ap stores, be it from Apple, Nokia, Blackberry, or even the mighty Google's Android, are NOT going to wipe out portable hand-held consoles. Simply put, it's not profitable to put real gaming interfaces in a phone. To draw a parallel here, mobile phone gaming is kinda like browser-based gaming: sure, there's MILLIONS of the games, and they're available at minimal or no cost. Yet they didn't even put any sort of dent in console or PC game sales, now did they? With smartphone games, they NEVER make the multi-million sales numbers that rake in a good fraction of a billion dollars. They're not the market of big-budget games for huge audiences. They're small-time stuff, and that's where it will stay.
In short, smartphone gaming is an ENTIRELY different market. Sure, it's growing, and making lots of money: but that growth is NOT being taken from elsewhere: markets are NOT a zero-sum game. This "new devices heralding the doom of an existing one" has been an oft-repeated story. And each time, the new type simply found a place alongside the existing favorite. The laptop computer did not replace the desktop PC: in fact, those who own a laptop (or netbook nowadays) also tends to own a desktop, too.
As far as Nintendo's next moves... Anyone who's paid ANY attention at all know that consoles and handhelds come in very distinct generations, that last typically 5-6 years, enough for Moore's law to allow for a significant, massive upgrade that can be used to justify a replacement of the old.
Yes, that means that we're reaching the end or so for the current generation, initially launched in 2005 with the Xbox 360. That means that graphics-wise, Nintendo's successor WILL be superior: that's just the way it is; the highly conservative Wii did manage to thump the over-the-top original Xbox, did it not? Even the 3DS surpasses the Wii, and looks nearly as good as the 360 and PS3; similarly good looks are coming from Sony's NGP. The wider audience, dedicated gaming controls, lack of high costs of buying a pricey 2+ year wireless contract, and bigger budgets for games ensure that Nintendo (and Sony: why the heck has the author neglected to mention any of this threatening THEM?) staying well into the foreseeable future. If either or both go down in this market, it WON'T be to some silly 99 cent smartphone games.