I certainly agree that the nature of games/gaming devices (especially portables) is changing, but I question whether it behooves Nintendo to be a follower.

I'm constantly annoyed by the fact that I can't use my Wii as a networked media interface to my TV and that it doesn't support HD. But I've never regretted purchasing the Wii, since there are so many games that are just plain fun, many with nearly unlimited replay ability (Wii Sports:Golf).

Much like Apple, Nintendo has a legacy of software-hardware tie-in. It's worked well and I can't see why they would easily cede the hardware aspect to Apple.