This would help Nintendo address several potential problems that they are otherwise facing all at once.
Sales of the Nintendo 3DS are beginning to slow down, no matter how much Nintendo insists that it plans on keeping the handheld around. Meanwhile, the Switch in its current form is incapable of reaching all the audiences the 3DS does, due to its higher cost and larger form factor. Nintendo may be looking at addressing both of these problems in one fell swoop soon enough.
According to a report by Nikkei, the Japanese firm is planning on introducing a smaller, cheaper model of the Nintendo Switch by the end of the 2019 financial year (i.e. ahead of March 31, 2020). The report says that the new model will be “more portable” and “easy to carry around”, and that it will come at a cheaper price. This would allow the Switch to replace the 3DS effectively, in terms of form factor and price, and it would also tie in well with the upcoming Animal Crossing and Pokemon, both of which are expected to greatly expand the reach of the Switch to new demographics, as well as help Nintendo meet their ambitious sales targets that they otherwise seem to be missing.
Right now, it’s just a rumor, but reports of a new Switch model this year have been doing the rounds for quite some time now (though Nintendo has denied them), so there’s no reason not to believe it, especially given the veracity of the source. That said, pending official confirmation, make sure to take this with a grain of salt.