Nokia have been standing still for too long. Their new smartphone platform, was not able to compeet with Android and Apple.
They have spent a huge amount of money on it, so that they are scratching it so shortly after release makes me think that they must realy been in a lot of trouble.
On the other hand Nokia&MS seems like a win-win. Nokia has the HW and MS has a good platform. The new MS mobile platform have gotten some good feedback.
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