tongue_of_colicab
Veteran
Yup but where the psp and ds more so have to worry is the casual market. Why buy and carry around a ds for sudoku and hexic when you can keep them on your phone and carry only one device ?
Because a iPhone costs like 4 times as much as a DS or PSP at the moment. And thats even without mentioning the very large group of people who even if they buy a phone are not interrested in such a expensive one as the iPhone etc or just cant afford them (younger kids). So I doubt there is much threat from phones for handhelds.
Besides that, how many really good mobile games are there? I doubt you'll see anything Zelda or GTA like on your phone. The only thing phone games are good for is preventing you from getting bored. Handheld games OTOH will actually make you have fun.