They lost the plot.
When flagship models pan (the N900 etc) and all the competition is doing better, it is not hard to understand why they are getting a profit drop. Nokia are playing catch up in all they do. They are making profit shipping the low rate candy bar stuff as cheap company phones.
Symbian is rapidly becoming a dead platform, Maemo was changed, taken off the shelves as a future concept in favour of meego, as a result the app store is really atrocious and it is easy to see why people look elsewhere. If no one thinks they have a future plan, no one will develop and the N900 is Nokia hoping the community wil finish off what Nokia started (badly)
Someone needs to talk to their ergonomics people, and their real life usage team, as well as the "What people want in a phone." department. (Guess what phone I own) Flagship my a***