Well, anything that takes away screen time and money is a concern. Basically, the money she's spending in Words with Friends or FarmVille, she's not spending on Nintendo stuff. But that all comes down to services and games, not specs.
Absolutely agree. By concern I meant such concern that Nintendo are about to go under and I don't think it's anywhere near that yet. They do need to look at Apple now that Apple are dominating that casual space.
Because phones are so portable and utilitarian I don't think Nintendo can do much to counter them. I don't believe the casual gamer will swap their iPhone for the 3DS (Or even take a 3DS along with them) and so I think there's a certain market of games that smartphones are going to completely own for many years.
"Portable" gaming in the home though is an area where they can get some ground back however I think they need to work on that utility. As a start they need to have those "go to" apps that people use all the time like Facebook, Twitter, Email, Web and Youtube. If, when using the Subscreen for some other task, they can easily get to those applications then they may be more likely to not be too worried about having their other device at arm's reach. Essentially it's about changing mindshare from one device to the other.
Then of course there needs to be the appeal of the other "applications" of the device. Be that enthusiast games (Although that's a small fraction), blue ocean type games (Wii Fit U), hobbies like drawing/painting, "video chat" and a myriad other apps that probably only Nintendo can think of.
However, when implementing social style applications they really need to move outside of their own closed platform so as to get a wider install base and pull in users who might not necessarily own Nintendo products. If MS hadn't have bought Skype that would have been the obvious option for video chat. Instead I think they need to make/buy an application that will work on Windows and OSX PCs and smartphones.
Anyway, I think there's a lot of things that Nintendo do that Apple just can't or won't do (Nintendo makes games with peripherals that sell millions like Wii Fit) and so long as Nintendo broaden their horizons and interface with other platforms I think they have a bright future.