After the Nokia-MS agreement, I actually don't think n. 3 position is at stake, but rather n. 1 and 2 in 5/6 years time. Rather than Amiga vs Atari ST, I see a PS1 vs Nintendo situation, when MS entered the game with XBOX.

I agree with Bruno that current hardware manufacturers for WP7 are the main issue with WP7 phones, for the simple reason that it is such hardware, primarily, that is not making WP7 visible to most consumers. WP7 phones just look like any other, while an iPhone has a clear, distinct, shiny personality. A LOT of it, actually by far most of it, IMO, is in the hardware - each component of it. Personally, that's what I actually like in the iPohones, especially the 4, which is a masterpiece in this. Antenna issues aside, design hw is just so good.

IPhone/Pod software... I am not impressed. It's not bad, but I think it is definitely worse than what what most people think. And, on that note, after testing WP7 for a little time, and as a Zune owner, I - by far - prefer the MS GUI paradigm that is underlying to both those devices.

So, I've been wondering why MS did not bring to market its own device with WP7 - I would have entered the market with two: one super shiny to rival the iPhone, another inexpensive -, and I suspect that partnership with Nokia is specifically aimed at creating both: some very shiny and cool and fashionable hardware, and other cheaper "for the masses". And yes, I think Nokia is pretty good at that.

Also, Nokia has a great reputation in that regard, especially in the EU. Here in Italy, for example, nobody/very few people would buy a RIM over a Nokia, still today. You end up with a RIM if your company gives you one. But Nokias... people just considered Nokias as the best mobile phones in the World for the last 20 years. Nokia was just amazing at building trust in consumers. If you want to go safe, people say, get a Nokia. Yes, it may be more expensive, but it's a Nokia. People tell stories on how their Nokia never broke and could pass it to parents, grandparents, friends, and it still works. And Nokia had some very iconic devices which are well remembered by most (and there again stories of when they fell from the 20th floor in a storm only to be run over by a truck... and it still works ).

And yes, now it it different, Nokia fell behind, but it would take nothing to build on such a long standing great reputation. From this perspective, MS just made a very smart move. Of course, there's plenty of room for a failure. But, not necessarily. Interesting times.