Despite some folk slagging the company for becoming iPhone copycats and whatever else with the DSi, Nintendo of America spokesperson Charlie Scibetta has said at least at first, the system isn't so much for that crowrd, but the hardcore:
“Right out of the gate [the DSi audience] is probably the hardcore gamers. They’re usually the early adopters that want to get the latest version of something, and they’ll be the ones that put it through its paces the hardest and give us all kind of feedback and tell us what they like and don’t like. [laughs]”
He pointed out most of the hardcore bought a Lite when that came around, and they expect this to repeat when the DSi comes out. After this, the 'expanded audience' will catch on. Moreover, he predicts some may just import the system. Well, Nintendo seems to know it's audience, since I've already talked about importing one myself (though I've since decided against, due to the region locking).
On another related note, while downloadable DSi-specific titles are in the works (new Brain Age, anyone?), it's been uncovered no plans for retail titles as such are planned. Good news or bad news? You decide.