EuroGamer has conducted an interview with Hideko Konno regarding the development of Nintendogs. An excerpt is below while the full interview can be read here.
Eurogamer: So what came first - the idea of doing a pet sim, or the idea of creating a killer app for the Nintendo DS?

Hideki Konno: Actually, the original idea was to make software dealing with various types of animals for consoles, and we were doing a number of different experiments based around this. Then Nintendo DS hardware development project began, and once we realised the DS was going to feature the dual screens, touch screen, microphone and wireless capability, we decided to make the software for the DS. We saw that by making use of the DS's unique functionalities, we could make a game based around puppies, and that it could be a lot of fun.