Many iPhone and Android fans don't believe that Nokia and Microsoft have much chance to succeed. While everybody agrees that they wouldn't have a chance without good partners, few seem to agree that they can do much together. The most frequent explanation is that their level of innovation is too low, and their R&D doesn't really work.
Most people, however, don't care about the phone producer's level of innovation. Even Apple consumers don't - they just want something that works. Nokia has been quite good at this, and I still think that S40 is a great OS for a phone if you don't want it to do much else than call someone and write an sms on a device that has a great battery life.
Nokia S60 was a usability disaster, but as long as sales were strong, Nokia believed that they were doing the right thing. Now they know that they didn't. The main problems are navigating the menus and application availability. WP7 seems to solve the primary usability problem, quickly.
So, who are Nokia's customers now and in the future? They already most of the techies to Android and iPhone, and the remaining customers often don't even know whether their phone is running S40 or S60. The OS choice doesn't matter to them. What they see others do, and want, is online address book sync, and access to the most important apps, like Facebook and Angry Birds, and maybe a calendar sync.
In USA, the biggest providers of mail and online address book services, are Hotmail and Yahoo. In many other countries, Gmail also has a small part of the market, especially amongst those that don't use Android or iPhone. The big question is, who will deliver the best contact book sync for Hotmail and Yahoo mail? Microsoft and Nokia are in a very good position for that. Facebook and Angry Birds are also available to WP7 customers.
So, if a customer uses Hotmail, and really doesn't care about weird app markets, which phone is best? An Android phone that doesn't really work well with his or her online mail and contact list, or a Nokia WP7 phone that just works?
I think there is a huge market for a Nokia 5310 like device, with the same battery characteristics and form factor, that can do facebook, has threaded SMS and sync the address book with Hotmail. WP7 doesn't need to do all the neat stuff that Android can do, in order to become popular.
Don't get me wrong, I love my Android phone. But a Hotmail phone makes much more sense than a Facebook phone.