Yeah, I think it's a little late for Sony to grab 1st place, but it's definately going to be a great console regardless.
I think in order to stay competitive with handhelds, there's going to have to be a merger between computers and video game systems. We're kind of seeing that now, but not to the extent that it needs to be for consoles to survive.
Imagine a Wii-like device with decent computer power, it's own OS with an art program, word-processor, photo program, etc, that plays games as well. This device would be connected to the TV as well.
Basically, consoles will probably have to become like the computers of the 80s (cheap computers with a lot of use, that can play games), or merge with handhelds (like the slim PSP which is a handheld and console).