I think releasing an official
MOGA-style controller for mid/high-end smartphones will be the
future of handheld consoles.
Samsung has already launched
its own version. Sony is already
implementing official support for the DualShock 3 on almost all Xperias. Plus kickstarter is flooding with successfully funded projects for adaptable gamepads for smartphones.
Only three essential things are missing in a high-end smartphone + gamepad combo, to make handheld consoles completely irrelevant:
1 - Unified driver like XInput in windows. Have all Androids supporting a device with an unified driver that game developers can use without worrying about which gamepad models to support, or moving the hassle of per-button/axis mapping to customers (this last one could be a huge turn-off).
This "standard" should also have the stacks for mandatory BT4.0 spec for low-power and NFC for fast pairing.
2 - Battery extension: Have the gamepads carry additional batteries with i.e. a retractable Micro-USB port to charge the smartphone while playing, in order to increase gaming battery life. Eventually, wireless charging may play a huge role in this. Just fit the smartphone into the gamepad and let NFC + wireless charging take care of the rest.
3 - Decent embedded stereo speakers in the gamepads. Apart from the HTC One, almost all smartphones really suck with a feeble backward-facing mono speaker.
They will also need developer support for higher quality games. I didn't number this because I believe it will come eventually one way or another. The major publishers can't be very happy with Gameloft making so much money by easily ripping off their franchises.
Plus, we're very close to having smartphones capable of running near-fully-fledged ports of the PS360. They can just port some of their best games and sell them for $5 for an easy way to increase profits over existing assets with minimal investment.
I think that if Sony ever releases a Vita refresh, it won't be for better graphics and more powerful hardware. They simply cannot keep up with the pace of the yearly-refreshed high-end SoCs from Qualcomm, Samsung, apple and now even Rockchips, Mediatek, Allwinner and others.
Rather, they'd shrink the SoC for higher battery life and maybe put additional analog triggers for better compatibility with PS4's remote play. Also, dual WiFi antennas for MIMO could be implemented for higher distances from the console.
Android would be the icing on the cake, though.