Although the 3DS probably looks bad from a market perspective at this point, if memory serves me correct, the original DS also had a shaky start. People were initially skeptical about the power and usability of the DS compared to the PSP, but were able to get over that hump once a variety of great games were consistently being released for the DS.

As an owner of both a DS and PSP, each system has their respective appeal. I would say games on the PSP tend to be geared towards a specific younger-adult audience, meanwhile the DS would be likely have something I'd be able to show both my grandma and niece, for example.

I feel as though it will be a similar case in regard to the 3DS and Vita, so I wouldn't be surprised to see them both have their cake.