Make the Super-Vita. It plays UMDs, it plays cartridges. It downloads and plays any game that is PlayStation. It plays emulators. It uses regular, cheap memory cards and chargers. It will have the best games in the world made for it and there will be loads of them. The Super-Vita will be well advertised to EVERYONE EVERYWHERE. And, thats exactly who would buy it.
Sony, it seems you have been trying to keep up with Nintendo. Just focus on your own game and not your competitors. Focus on your audience, which is huge and very loyal, and the success will come. Make the very BEST handheld you can and it will surpass ANY other handheld before it.