This argument combined with the argument of the 'designed obsolescence' also pops up regularly.

It is true that 'Nokia sells hardware' but this is just part of the story. Nokia develops a consumer offering based on devices, software and services. Harware is very important in this strategy and so are the software platforms, the application developer ecosystem and the Ovi services. As opposed to a specific device, software and services can be continuous and evolutionary. They can support very well the very important job of customer retention.

If the owners of a Nokia XXX are happy with this offering, one day they will move to Nokia XXY, or perhaps Nokia YYY. They will recommend Nokia to their relatives and friends, etc.

If the owner of a Nokia XXX is unhappy because one or more of the pieces described above doesn't work, they will start their walk away to other competitors.

So you might get WONTFIXES and FIXED in [next release], and that [next release] might or might not be available for your next device. But don't think that Nokia doesn't care about bugs in current releases and about the satisfaction of the users getting those bugs.

What do you mean 'reduced activity'? Can you express it with numbers or some more details?