Nothing new buts its worth repeating.

Nokia's profit margins will go down like it happened with all hardware manufacturers who don't control the software part. Lets not forget that nokia stocks were dropping because investors realized nokia will become another Dell. Not exactly irrelevant but nowhere near the expected profit margins they would have had even with a relatively small Qt ecosystem. Remember nokia once said they think about outsourcing manufacturing and concentrate on software, it looks like elop has other plans.

Quote from an investment banker (businessinsider.com):

The old CEO was fired, and Stephen Elop, a Microsoft executive, was brought in as CEO. It seemed that things were getting brighter. However, knowing what I know now, I truly believe that Mr. Elop was the worst thing that ever happened to Nokia and one of the best things that had happened to Microsoft for a long time. Elop announced that Nokia would abandon both Symbian and MeeGo and start making cell phones to run exclusively under the Microsoft Windows OS. With this move, Nokia went from being an Apple-like business that could differentiate itself from competitors because it controlled software and hardware and commanding low-teen profit margins (Apple’s margins are actually pushing the low 20s now), to a Dell-like company with net margins of 5% in a good year.

Though the Windows decision may have benefited Nokia in the short run, in the long run it reminded me what IBM did with Microsoft in the ’80s: it saw little value in the software and went after the hardware business. Cell-phone hardware will become ubiquitous in a few years and Nokia will be competing on price and manufacturing efficiency with its rivals. Microsoft on the other hand will get Windows installed on a huge number of phones, and it will benefit from Nokia’s enormous distribution system. And it only cost Microsoft a billion or two. When this announcement was made the market rightfully punished Nokia stock, and we got out at around $8.