@Spanner, @Clasificado

The fact that Nokia is a hardware maker and hence it is in their interest to let the device die hasn't escaped me. However, for the fact that people continue buying Nokia devices would take a bit more than purely hardware. I do agree that the model can't go on ad infinitum, however the N900 can certainly last for 2 years or so, and the benefit for Nokia would be that these people would probably buy another Nokia device after the end of the support period (seamless transition and all...a model that has worked well on PCs and even iPhones). So effectively they are subsidizing the costs of the current development against future revenues from these customers, whom they would have probably pissed off otherwise.

This is not all that far fetched given what every major software house has been doing for ages and is quite the accepted model in a lot of other hardware/software combination heavy industries (e.g. the CCTV industry upgrades you to the next available codec if you have the support contract and the hardware can support it). It definitely needs a change of mindset from Nokia's perspective though

EDIT: Another thing I forgot to mention is that Revenues is not the same as margin. While Nokia would have made a lot more revenues by selling the hardware, the margins on hardware, after factoring in all the distribution costs etc. are tiny. So $600 for N900 is not all profit...if anything the profit can be as little as $50, whereas a service such a a firmware upgrade can be much more profitable because there are very few overhead costs.