Nintendo to unveil DS2 at E3?

Per engadget, Nintendo may be announcing the Nintendo DS2 at E3 this year. They are speculating that the newest in the line of handheld systems could be available by the holiday season this year as several developers have stated they will have games ready for it by the end of the year. This is coming right on the heels of the DSi XL and would be the 11th major handheld system developed and manufactured by Nintendo for distribution in the US since the original in 1989:

1. Game Boy
2. Game Boy Pocket
3. Game Boy Color
4. Game Boy Advance
5. Game Boy Advance SP
6. Game Boy Micro
7. Nintendo DS
8. Nintendo DS Lite
9. Nintendo DSi
10. Nintendo DSi XL
11. Nintendo DS2

Considering the strong growth in the handheld market, it is clear why Nintendo has such a fast turnaround on developing new systems. Unfortunately, it looks like the iPhone is whittling away at the need for a gaming-exclusive handheld device; Nintendo's DS sales have dropped 15% in the last year while the iPod Touch and iPhone game sales have doubled. As Nintendo undoubtedly knows from the success of the Wii, accessibility has become key to selling games, and for the millions of people already carrying an iPhone/iPod Touch in their pockets regularly, downloading and playing a game are just a touch away. The question for consumers lies in whether it is better to have a separate, more powerful handheld gaming device, or a less powerful but more diverse one (over 21,000 titles vs. DS' ~3,700) in a multi-function device. I would bet that for hardcore gamers and children, the choice will continue to be a gaming-exclusive console, with casual gamers flocking to the ease of gaming on their phones and MP3 players. There is room in this growing market for everyone (for the time being).