Well, if you look at the facts you laid out a bit differently, you might reach slightly different conclusions. Yes, if you don't produce your own OS you have a lower profit margin. On the other hand, you point out that employees will be let go. The upshot of this is that you don't have the cost of creating and maintaining the OS. Given that Nokia is spending much, much more than even Apple who also makes their own OS (wasn't it $2 billion vs. $464 million over the same time period?), this could result in a net savings. Doing things in-house is not always cheaper. Drawing on my own field, it's often cheaper to use trucking firms to deliver your outbound freight rather than creating and maintaining a private fleet. Given that Microsoft really, really wanted this deal, it's likely they've also given Nokia a bargain on licensing costs - they may be looking to make their money from the ecosystem (where Nokia probably isn't making much if any now anyway). Looks are a bit hard to get into since they're all just rectangular slabs anyway and I wouldn't be likely to tell one phone from another if my life depended on it. The N8 does come in nice colors, though. It's also not just the looks - you're omitting the fact that the N8 has a photo sensor rivalling that found in standalone p&s cameras! When the mock-ups of a Nokia WP7 phone appeared on engadget, the comments were filled with people saying they'd buy it. I said elsewhere - it shows that people love Nokia hardware and hate Nokia software. The Nokia name is still synonymous in people's minds with great hardware. I also said that they'd buy any Nokia phone so long as they knew Nokia didn't write the software, even if it was running Microsoft Bob. On your other hardware point, it voids the warranty, but you can replace/upgrade the memory card on the new Dell WP7 phone. Nokia doesn't "have to make as much money as they do now". I hope they don't initially. I know from personal experience that when a company dominates to the point it just has to sit back and let the money roll in, it becomes complacent and its managers don't want to touch anything for fear they'll knock the company off auto-pilot *cough*Bed Bath & Beyond*cough*. They're going to have to start coming up with new ideas if they want to build back revenue. In fact, a recent article about Microsoft proposed they artificially create something similar - start giving out dividends and agrreeing to increase those dividends each quarter. This would put pressure on the company to start creating new revenue streams. Nokia does have to stop the market share slide, however. They're not going to build an ecosystem overnight even with Microsoft's help, but they'll be able to get back in the game quickly and go up from there. Why would Microsoft want to buy Nokia? They've always been about the software. Toshiba built the first Zune - Microsoft didn't buy them. Finally, Elop is not a trojan horse sent into Nokia by Microsoft (who used mind control to get the board to hire him) to intentionally destroy Nokia (again while the board and shareholders are paralysed) just so Microsoft can buy a company at a bargain price that it doesn't need.