It doesn't seem like a bad regroup strategy, but whether or not this is long-term remains to be seen. I agree, if this is long-term, then Nokia will be just another handset maker.

If they go WP7, they will still potentially be sacrificing the low/mid-end market, as WP7 is tied to a minimum spec, which is rather high-end -- this is Apple's territory. Android will continue to dominate the mid-range and slowly encroach on the entry low-end devices. Nokia would be fighting Apple, and to a lesser extent, Android for the high end with a platform that is yet to gain serious traction, and all the while leaving their strongest market vulnerable to a beast of a competitor which is known to be advancing.

Trying to capture the masses with the catch-up tactic of 'moar appz' is a losing battle. There's very little reason for developers to even consider Nokia's upcoming platform with Apple and Google gobbling up market share at a break neck pace.

The armchair CEO in me says, go Android, but differentiate with *something*. Maybe device tie-ins, or corporate functionality, but something. Buy time, fall back, and continue developing QT/MeeGo and searching for a good leader.