re narrow point of view → #
Saying things like "your point of view is very narrow" is a dangerous accusation mate. There's a few things maybe you should consider too, that might widen your own view:
1) Smartphones have yet to saturate the market. Of course Android is only going to get bigger, but it's not a zero sum game yet so WP7 has room to grow too. (Why might it grow? See point 6)
2) Smartphones is the main growth sector in mobile, and intersection of internet and mobility in general is encroaching everywhere. (Just ask TomTom, or any other large company now under threat). Basically, if you make mobiles but you're not near the top of the smartphone game, you will have serious trouble in several years regardless of how important you used to be. Nokia are not near the top.
3) Given that WP7 does have room to grow (see point 1 and 6), being the big fish in that pond is very very valuable, for reasons that are pretty obvious but include being the dominant brand partner when your product is on the shelf (differentiation from Samsung/HTC et al right there) as well as having more say in R&D matters
4) Both Nokia and Microsoft need a turnaround, otherwise they are going to lose their significance in markets they used to dominate (note, this is not "death" - anyone who says Microsoft or Nokia are "dead" has such a narrow point of view that you could well consider them an idiot). So, there is shared goal here. The whole Nokia-Microsoft announcement needs to be viewed in this context. It's not a perfect outlook for either of them - that's not news, hey? But they can now concentrate on what they supposedly do best, hardware and software, and meet the joint Apple/Android threats
5) Software and hardware constantly get mixed up when talking about all this. You do it yourself: "once the android market was tiny, HTC entered, no competition, had to improve, iphone drove up the quality bar and HTC met that challenge, the latest HTC phones are amazing" The iPhone was not an amazing phone, but it offered an amazing experience. HTC might have raised the hardware to match the iPhone, but Google matched that with ratcheting up the Android experience. Hence, an HTC-Android became a viable competitor.
6) The take-up of OS in the smartphone market is based entirely on meeting the experiential minimum standard first (bye bye Symbian) and then things like number of apps and future flexibility and the intangibles like whether your mates are on the same OS. As per point 5, the WP7 experience is on Microsoft's side of the bargain, and while they have work to do to catch up Android and iOS you can't just call fail because they are "Microsoft" and people therefore don't like them. My friend has an Xbox, let's ask him whether Microsoft are crap. MS just need the WP7 to be as fun and useful as the others. Whether they can do this is the gamble, but there's still time. WP7 is not Windows CE.
7) When huge companies work together, it helps to have leadership who understands both companies. Having a Microsoft man at Nokia is an advantage, not a trojan horse. The man *knows* the people he has to deal with. You can't ignore that advantage and just label him some kind of spy, as some people on here have
Basically, there are huge holes in the thinking of the majority of people who have been posting about Nokia-Microsoft - this is what makes a narrow point of view. WP7 is not "inevitably" dead. It's a gamble for Nokia to so firmly put their colours on the WP7 mast sure, but it's still too early to call "inevitable death" for Nokia or Microsoft. Ignore the falling share price for now, and look at the future. Nokia didn't have one before.