I've seen many suggest that Nintendo should port their back catalog of games over to iOS simply because "people would buy them" - ignoring the fact that these games need dedicated input control and smudging your fingers up against glass with no tactile feedback is a terrible experience. This would never happen (yes I know about emulators).
Nintendo recognizes Apple as their main competitor now and it's hard to compete with a company that refreshes their hardware yearly, making the old "console advantage" not much of an advantage anymore.
Nintendo will always be around, they hold the keys to the greatest video game franchises of all time[1], but I think their future will be in handhelds. You can already see a shift happening as the majority of their focus has been on the 3DS this year.
Their next handheld after the 3DS really needs to be a hit for them.
1. http://en.wikipedia.org/wiki/Category:Nintendo_franchises
Nintendo has to compete against that, and it is not easy. On the other hand, Nintendo could make an absolute killing by selling a gamepad accessory for the iPhone - extra battery life plus a decent d-pad/thumbsticks would be an easy sell for gamers. You could probably even price it at a pretty steep mark-up and make nearly as much profit as they must be making on the DS. Make all Nintendo games compatible with it, and run a licensing scheme so that other game companies can list themselves as compatible with the hardware.
This strategy allows Nintendo to continue innovating where they have successfully done so in the past - specifically with clever input devices. It's been a long time since Nintendo could claim to rule the roost for things like raw processing power, so leave Apple to do the heavy lifting there.
When would you have to walk out of the house with only one gadget?
In fairness, that says more about my phone than my DS, I think.