The highlighted would make more sense if:
1) There were actually any competition in the dedicated handheld market. There's none.
2) If the west (mainly developers) cared anything about dedicated handheld devices. Right now they don't care much about them. Then there's the general public and how happy they are using smart devices for gaming on the go.
Regarding the public reaction to the device and time for adjustments. i think the MS blunder is affecting your judgement here and in any case it had more to do with a politic than anything related to the console itself. Historically Nintendo is less influenced by public reactions, that's why we have devices that tend to defy market trends from them more than the other 2 hardware manufacturers.
I think Nintendo knows that so long as their handheld is on par in power with the Vita, is able to run UE4, and is easy to port to, they will be able to get whatever is left of Japanese support on dedicated devices. Any Japanese developer that doesn't want to support Nintendo's next handheld would be better off just imitating Konami and go all-in on mobile as soon as possible. Their gimmick and what they hope is going to help them is that these handheld games will also appear on their console because of the shared OS. It's actually quite similar to MS's plan actually. MS is focusing on a single Windows ecosystem which PC, Xbox and mobile will share in and Nintendo is focusing on the NX ecosystem they are making which includes their handheld, console, and mobile. This is also them both taking advantage of a major flaw that Sony has as their PlayStation ecosystem will eventually just consist of only the PS4 since both PS3 and Vita will die natural deaths and Vita will have no successor. Sony doesn't even have any real mobile division as well. Yes, Sony's sold the most consoles, but that could very well be a Pyrrhic victory as MS makes effectively Windows HTPCs under the Xbox brand in the future and Nintendo's console can also run their handheld games.