A small snippet from Ars Technica's thorough look at the hardware (added emphasis mine):
It's a confusing time in the world of mobile and portable gaming. Consumers seem to be moving away from the idea that they need an entirely separate device to play games on the go, settling for cheap, generally simple touchscreen games on their cell phones and tablets. Nintendo, following up the insanely successful DS system that rested on a seemingly gimmicky double screen design, added a newer glasses-free 3D gimmick to its Nintendo 3DS—only to see extremely slow sales force it into a premature price drop. Sony's PlayStation Portable, meanwhile, has carved out a niche for itself as a serious gamer's system, especially in Japan, but is beginning to show its age as a system designed in the pre-smartphone era.
For the new PlayStation Vita, Sony responded to this confusion by throwing everything and the kitchen sink into the system. For hardcore gamers, there are two analog sticks—a first for a portable system—and a gigantic screen loaded with pixels. For casual players, there's the now-ubiquitous touchscreen as well as a unique rear touch panel to enable new tactile, touchy-feely gameplay. The Vita has two cameras, a GPS receiver, and a 3G data option. There's music and video players, a Web browser, Google Maps, and even a proximity-based social network. Oh, and it also plays games, I guess (more on those in a separate post).
It's a curious approach. What's likely to keep standalone portable video game systems afloat in the face of cell phone gaming is not processing power or connectivity--the rapid improvement in iterative cell phones will always dwarf static platforms in these areas after the gaming systems have been on the market for a short time. The advantage of these dedicated game systems is in the optimization for gaming itself: developers can spend long development cycles on ambitious game designs because the hardware target stays the same for a long time and control mechanisms can be offered which can not be touched by devices which need to be more flexible.
Sony's approach hasn't sacrificed that optimization here, but the entire fate of the system's success rests on how well it performs in the games area. These dedicated systems will never be preferred by a large enough audience over a good smart phone for most things. The PS Vita and Nintendo 3DS will be purchased--or not purchased--entirely on whether people who care a lot about playing really good games decide the quality of gaming on offer is worth having a dedicated device at all. The Vita and 3DS don't have the advantage home consoles have of being set up on the television--the display people use for any number of things, thereby justifying all manners of streaming media and family interaction as a selling point. If gaming ends up being an afterthought on the Vita (I'm not implying it is--it is far too early to tell), the device will fail.
Let's see how this plays out. I think there's more than enough space for both the Vita and the 3DS, despite the burgeoning smart phone market--even if they become a rapidly decreasing percentage of the total portable game market's revenue.
In the meantime, check out the article at Ars. There's a whole lot of detail there.