The console can't be as cheap as the handheld.

This has frequently come up in discussions about a potentially low Wii price.  Usually the reason given is that it will make the console look too cheap, or that they'd cannibalize each others' sales at a similar price point.  I say that history shows this not to be the case.  These same arguments came up in late 2003.  Game Boy Advance SP cost $99 at the time, and so did GameCube.  What happened?  By US numbers, both systems had their best holiday season ever.  Two cheap systems didn't cannibalize sales; instead they were both successful for the same reason.

2001, November + December

$199 GCN: 1.21 M

$99 GBA: 2.63 M

2002, November + December

$149 GCN: 1.01 M

$99 GBA: 3.34 M

2003, November + December

$99 GCN: 1.91 M

$99 GBASP+original: 3.44 M

2004, November + December

$99 GCN: 1.15 M

$79 GBASP+original: 3.18 M

2005, November + December

$99 GCN: 0.88 M

Micro/SP/GBA: 2.03 M