Are you insane? You think a company distributes all its profits in dividends? That is far from the case. Nintendo for example is sitting on billions and billions of cash. The board decides out of the available profits how much to distribute. Decisions will also be made as to how much to pay staff and how much to spend on R&D.

A company which brings in mad profits and has lets say $10bn cash is almost more likely to spend more on R&D than a company that has only $500m cash.

And yes increasing R&B budget does not automatically result in an exact proportionate increase in product quality but can you seriously suggest that increased cash on R&D and getting the best staff on board does not increase likelihood of increased product quality?

And the shared view here that things are so rosey at Nokia (shared with Nokia execs it seems) and they should continue as they have been may be the reason why Apple has come out of nowhere and blown them away and why it will not be a shock to see HTC do the same.