"He was wrong, but could anybody have reliably predicted it at the time?"
A huge number of Reg readers predicted it. Well extrapolated from MS EEE approach that has existed since they got bigger than a shed.
A large number of Reg readers predicted the failure of the iPhone and iPad. The triumph of netbooks. All sorts of other things. You can always find someone to say "I predicted that". But unless they're consistent about being right most of the time, why would you listen to their opinion beforehand? A stopped clock is right twice a day...
Microsoft aren't a hardware company (even though they sell quite a bit of it). Why would they want to own Nokia? It's clear their board didn't, even after Ballmer decided he did. So that blows the trojan-horse bollocks out of the water. As if anyone believed they were capable of the machiavellian plot under Ballmer anyway.
Microsoft are a software company. It's how they see themsevlves. And they therefore want to sell software. This meant that they'd never give Nokia total control or priority. As they'd always be hoping for other partners to join the Windows Phone ecosystem. But it was clearly in their own self-interest to do everything they could to help Nokia.
It was perfectly valid for Elop to believe that his connections at Microsoft should get him some leverage. Remember Microsoft were paying Nokia well over a billion dollars in marketing support as well. So it's not as if he didn't get a commitment out of them. And everyone in both companies knew if Nokia failed, that Windows Phone would fail. Which is why Microsoft just bought a failing phone company they didn't even want for $4 billion. Although I suppose that's still a better purchase than $10bn for Autonomy...
Finally, the people who argue that MS weren't a suitable partner fail to say who was. Google weren't offering free money. They were offering to buy Nokia's patents off them, i.e. buy their crown jewels for cheap. Bearing in mind the Nokia board haven't even sold those patents to Microsoft, only given them a ten year license. So Google's deal was pretty shit. And Google don't give a damn about their hardware partners. Notice how only Samsung is making any money?
So Elop's options were to go MS, or keep on trucking with Nokia's internal development, and see if he could get something out the door from all their wonderful innovation. Which presumamably meant taking a couple of layers of management out into the forest and shooting them, then finding some more management that could pick a winner from all the competing projects, push more engineering resources into actually finishing one of them - and actually shipping some product. Nokia had failed to do this for the last 5-10 years, so although I think Elop was a wuss for not trying it, I can well understand that he thought it was too much of a gamble, and decided to bet the shareholders money on something a bit safer. And his bet paid off. They got to sell their phone division to MS. That was always a likely (if by no means certain) plan B, as MS would have to buy Nokia or see their entire mobile strategy go up in flames. Rather like Nokia, they were doing well in mobile up until 2003. But then masively dropped the ball.
The most telling thing from the article for me is the bit from Nokia's ex CEO. I very much doubt that it's unprecendented in the whole of history for two outside players to come and take over another industry. He seems to be drawing the lesson from that, "well what do you do?" Whereas the lesson I'd draw is that a large industry's leading players had failed so spectacularly that two outside companies had managed to come in, and kick seven bells of crap out of the incumbents, because the incumbents were crap. If theyve been well managed, there would have been less opportunity.
Also MS were a new player as well. Those with longer memories will recall how MS were going to fail, when they entered the mobile industry in the late 90s. And how Nokia and Sony were going to cooperate over Symbian, so that Windows Mobile wouldn't do to them what MS did to IBM. And yet by 2003, MS had half the smartphone market, and Sony and Nokia had totally failed to cooperate over Symbian. As I well know, as a former Sony Ericsson P800 owner. Great phone, but the software was crippled by the fact that Sony and Nokia had made their two versions of Symbian incompatible, so whenever you found a good app you wanted, it was always for the other version.
So my conclusion from the fact that Microsoft, then RIM, then Apple, then Google then Samsung entered the mobile market and all came to dominate (to various degrees) in their turn, is that the incumbents in the industry were shit. And managed by useless tossers. As they had all the patents, and all the contacts. Where are the mobile giants of Sony, Ericsson, Motorola and Nokia now? Admittedly Sony are still going, but there seems to be a rumour every year that they're going to give up on phones, and I don't think they've turned a profit in the last 5 years. Maybe more.