Uhhh...
The Nintendo DS is a 3RD tier, a way of experimenting, invigorating innovation, a new line for profit, it is seperate from the GameBoy line, it is meant to be a stumbling block before PSP even get's to market. And while everyone will say the DS is the "next GameBoy" and that the DS & PSP are in dirrect competition...PSP's *true* competition will be the next GameBoy. The DS will hold it off until that true battle takes place. They will take what works with DS, wait for when the GBA starts to dwindle and release a more powerful, more capable & cheaper competitor for PSP.
If Nintendo had stayed with the GBA by itself, they would've looked old and tired next to the PSP.
If they had tried to go head to head with PSP with a comparitivly speced portable they would lose money (like PSP), have battery issues (like PSP) and end up losing in the end 'cos Sony is KNOWN for electronics where as Nintendo isn't.
So they created the 3RD tier Nintendo DS...something that wouldn't shorten the life of the GBA, something that would give them an oppurtunity to cash in on N64 ports, a devise that may not be as "high-end" as PSP, but that offers more innovative ways to play games at a cheaper price and with better battery life.
The GameBoy empire has had "better" competitors before with better graphics & features...hell Sega Game Gear was color while GameBoy was still monochrome. Sony is truly the best competitor the GameBoy line has ever faced, but portable gaming is still about being cheap, being durable, having a good battery life and it's also about being a secondary form of gaming to console gaming. Sony is doing good so far, but they're putting more emphesis on specs and power, while putting the price, battery and durability issues (again, the backbone of the GameBoy line & portable gaming in general) on the back burner, all while trying to turn portable gaming into something it can't be 'cos portable gaming will ALWAYS be secondary to console gaming! The DS isn't a GameBoy, it's a stubbling block while Nintendo gathers themselves for preperations for the next GameBoy...the handheld that will truly compete with PSP.
Everyone needs to relax, 'cos I can see all of these portables holding thier own as long as they remain profitable. GBA profitable...check, DS was obviously cheap to make so it's profitable...check, PSP sold at a big loss with the hopes of making it up in software royalties in a secondary gaming market with traditionally less tie-in ratios...um, maybe no check there for a while, then GameBoy Evolution hits at a time when competitive technology is cheaper/more capable making profits achievable much faster than PSP...check.