Smartphones ARE game consoles.
Right. Let me know how Battlefield 4, Team Fortress, Uncharted, Halo, Call of Duty, et al, are working out for you in a 4 inch screen with touch controls.
Wake me up when your iPhone has almost 2 TFLOPs of computing power and delivers games with 25Gb of graphical content.
Smartphones replace game boys and PS Vitas for casual gamers, they don't replace console and desktop PC gaming by a long shot.
But yeah, Candy Crush Saga and Angry Birds run great.
When was the last time 100,000 people tuned in on Twitch.tv for someone to play a mobile game?
It's not a zero sum game, and it's not an either/or. There's no meaningful segment of the gaming industry that's declining in absolute numbers (most are growing at varying rates), it's just that the industry has been exploding over the past 15+ years, and each segment is now a smaller slice of a much bigger pie.
And the typical cycle is not 2-3 years. It has been 6-7 years for the last few generations. Not sure you even play console games...
They are a threat to traditional game consoles; yes.
They don't have the uniformity-over-time of game consoles, but they do have large distribution.