I'm interested by this move - remember Mary McWhatever (in charge of dumb phones) saying in her June speech (just before the official announcement of N9!) that S40 was going to be "the future" of dumb phones because they were going to innovate and invest in that low-end OS.

Maybe they changed their minds and bought Smarterphone, because it has some better UI/UX elements that make S40 look sad and outdated, even for really cheap devices.

Nokia have to do something major in 2012 for the low end, I'm sure people with a tight budget are going to go for that $39 Samsung running Android before they pick a $39 Nokia running S40. Just my 2c