How cheap do you think 3D screens are?
How cheap do you think tegra 2 chips are?
ARM chips?
Touchscreens?
R&D?
Unlike with a console Nintendo doesn't have to use proprietary tech for the DS anymore. The handheld market literally exploded with the coming of age of the smart-phone
as much as I wish it wasn't true the iPhone was a HUGE part of that . Now the chipset that is rumored (Tegra 2 as you mentioned) will be mass produced, so whether or not Ninty is buying huge quantities, the price will go down, and I'm sure Nvidia will be glad to stamp their logo onto the 3DS, showing the power of its chips, and garnering them more sales. The same goes for the Sharp with their screens. They want to use their tech in a wide range of gizmos not just the 3DS.
This means two things for Nintendo:
1. They know the price of their hardware is going to decrease much faster than ever before.
2. They DEFINITELY made deals with both Sharp and Nvidia (or whoever is providing their screens and processors).
While people who think of themselves as hard core gamers might call the DS kiddy or gimmicky all that matters to a hardware provider is sales, and I'm sure any manufacturer (Nvidia especially) would be thrilled to move half as many of their new product as the number of DS Phat's sold.
Lastly just for point of reference, the Tegra is not just a GPU. It is all in one, so Nintendo doesn't have to cost out the Tegra chipsets AND ARM processors they are already in there:
The NVIDIA Tegra architecture is a heterogeneous multi-processor architecture that consists of eight independent processors for graphics, video encode and decode, image processing, audio processing, power management, and general-purpose functions. These processors are power managed independently with local hardware control and system level control built into each processor. A system-level power monitor allows the Tegra processor to turn on only those processors required for a specific use case, while keeping all other processors turned off.
Tegra’s purpose-optimized processors are analogous to a carpenter’s tool kit that has various tools such as hammer, saw, screwdriver, and drill. A carpenter does not use a hammer to drive screws or a drill to cut wood. Each tool is optimized for a specific task or function. Likewise, the Tegra processors are all specialized for particular tasks
- Graphics Processor (GPU): Delivers outstanding mobile 3D game playability and is also used for visually engaging, highly-responsive 3D touch user interfaces.
- Video Decode Processor: runs video macro-block oriented algorithms including inverse discrete cosine transforms (IDCT), variable length decode (VLD), color space conversion (CSC), and bit stream processing to deliver smooth, full frame rate 1080p HD video playback and streaming HD Flash video playback without compromising battery life.
- Video Encode Processor: runs video encode algorithms to deliver full 1080p HD video streams for video recording and conferencing capabilities.
- Image Signal Processor (ISP): handles light balance, edge enhancement, and noise reduction algorithms to deliver real-time photo enhancement capabilities.
- Audio Processor: handles analog signal audio processing to deliver over 140 hours of continuous 128kbps mp3 audio playback on a single battery charge.4
- Dual-Core ARM Cortex A9 CPU: for general-purpose computing delivers faster web browsing and snappier response times on Java enabled websites
- ARM7 Processor: handles system management functions and several proprietary battery life extending features on NVIDIA Tegra.
Each processor adds instructions, caches, clocks, and circuits optimized for each specific task, with performance monitors to track system activity. Each processor is designed to provide the performance needed for demanding and heavy workload tasks such as browsing java enabled Web pages, HD video playback, responsive 3D user interfaces, and gaming. The proprietary power management features in the NVIDIA Tegra processor track system workload levels and continuously manage the frequency and voltage of each processor to provide the demanded performance at the lowest possible power. Using a set of dedicated processors, the system can easily handle multi-tasking loads that include a combination of 3D, video, communications, and audio tasks. When loads do not require multi-tasking, only the processor required for the task is used while all other processors in the system are turned off, thus achieving the lowest power consumption possible.
Power efficiency as you can see a big part of all this for those worried about battery consumption.