So it is not true that a 'netbook sucks' or 'smartphone is better than laptop'. All utter nonsense. It depends on how you are able to take advantage of the combination of software, hardware, and service provided by the end product. It is also not true there is no demand for both laptops, desktops, smartphones, netbooks, and so on because each device has its unique advantages in certain situations.
What will decide popularity and success is many things. Brand recognition (both Nokia and Google have this), time to market, stability and ease of use, word to word marketing. Not necessarily the best product becomes the most popular or defacto standard.
But Nokia does not look confused.
They go on with making devices for specific purposes (Nokia phones) where hardware is optimized for specific markets. Meanwhile they open source Symbian and switch to Qt, while using Linux and open source ecosystems to build upon. They will continue to build many Nokia devices each made for specific purposes (optimization) but want to use underlying standards to make software ecosystem easier to manage and allow community support after device is EOL. So then users will be able to use a device like N95 (former flagship; still good device, but getting old) with up2date 3rd party firmware instead of stuck with older firmware. This increases customer satisfaction, and Nokia still sells their hardware becuae their hardware 1) is specialized 2) gets better.