The Wall Street Journal reports that Satoru Iwata, the president of Nintendo Co., doesn't see Apple as a competitor for control of the handheld market, but Apple sure does. According to Apple's head of marketing, Phil Schiller, the Nintendo DS and the Sony PSP were "so cool at first" but "don't stack up" to the iPhone and iTouch's vast variety of different games. With the iPhone and iTouch, people can design thousands of games and most go for $10 or under, while the DS sells most it's games new for $20.

Nintendo, who plans to release a new version of the DS handheld, has survived many competitors in the handheld market including Sega's Game Gear and Nokia's N-Gage and none have succeeded in taking the market. But Nintendo isn't invincible to cellphone games. Last month, Nintendo reported a 52% decrease in profit for the first half of it's fiscal year, which ends in march, as sales of the Wii and DS cooled. Nintendo also expects it's annual profit to drop for the first time in six years.

Mr. Iwata says that Nintendo has an experience that no other device can mimic. And with famous franchises like Mario, Zelda, and Pokémon, Nintendo is pretty confident that it can stay ahead of Apple.

Industry analysts expect Nintendo to release an all-new handheld in 2010, even while Nintendo has been making changes to improve the DS since it came out in 2004. Global sales of the DS were recently down 15%, though that is nothing compared to other handhelds, like the 38% drop in sales of the Sony PSP.

Nintendo and Sony say that since their systems are designed to be game machines, "from the actual game play to the games themselves, [they] don't see any real overlap."

Nintendo is preparing to debut its new DSi LL model, which has a larger screen to enable more group play and web browsing. The new DSi LL will go on sale November 21 for 20,000 yen, which is about $222. It will then be expected to go on sale in other regions next year.

When asked if Nintendo will add a phone to the DS, Mr. Iwata said they will not because it will cost money for the plan. He is interested in the Amazon Kindle's system because they don't have to pay to directly receive and send data. "My job is to find the potential in something that others can not see, to secretly pour our resources into them and turn them into hits before anyone else catches on."