Nintendo Reveal A Large Version Of The DS Lite Was In Development

In The Latest Iwata Asks feature on Nintendo UK, it is revealed that soon after the Nintendo DS Lite was released, research and development began on a Large Screened Nintendo DS. Ultimately, the Large Nintendo DS was shelved.

Yoneyama reveals that research into a Large Screened DS started because:
"Certainly. Well, after the Nintendo DS Lite came out, we wanted to make the graphics a bit more easily viewable by having bigger screens and we even got as far as producing a mould, conducting developmental trials and were at the stage where we could have gone into mass production..."

In The Interview, Yoneyama reveals that the product was never produced because:
"Things were going very well with the DS Lite, so it was decided that we’d put it on the back-burner for the time being."

And Iwata says that Nintendo's focus was to make more Nintendo Wii's.
"We were also struggling to try to ramp up the production of the Wii console which had been released in 2006, so I thought that to release yet more hardware and further diffuse our energy would have been wrong."

Yoneyama reveals that technical issues were also to blame for the Bigger Screened Nintendo DS Lite being shelved.
"But at the time, in terms of cost, our limit for the LCD screen size was about 3.8 inches. Also, we wouldn’t have been able to use wide-viewing angle LCD displays as we’ve been able to with the Nintendo DSi XL."

From Nintendo UK: Iwata Asks