If you have a strong stomach, take a look at Nokia's stock performance over the past few months and you will see a bleak picture. As of this writing, Nokia's stock is down over 9% on the day to less than a gallon of gas. The price, ~2.16 per share, is below their 52 week range signaling that Nokia stock is not on a short decline, but a systemic fall.
Nokia is certainly in a tough position as it has just announced that it will layoff 10k employees and is initiating drastic re-organization of the company. With Microsoft announcing that current Windows Phone devices will not be upgraded to Windows Phone 8, Nokia will have a tough time effectively marketing its current generation of smartphone. Yes, Windows Phone 7.8 will be a welcomed upgrade and will bring it to visual parity with launch Windows Phone 8 devices, they are still a dying breed as Windows Phone 8 applications will not be backwards compatible (current Windows Phone applications will work on Windows Phone 8).
Nokia's future is uncertain which is why the stock is falling but the company is not alone. RIM also finds itself in a similar position but that company is still sticking to its own OS and hardware, for now. For Nokia, it is hard to ignore the noise that Microsoft is likely to aquire the company as these rumors have been circling the Internet ever since the two announced their partnership. While switching to Windows Phone 7 was a big gamble, the future of the company will be determined with Windows Phone 8.
Seeing as Nokia is expected to run out of cash reserves in 2013, if Windows Phone 8 doesn't generate stable cash flow, the company will sink even further and put in a vulnerable place for acquisition. The question is, can Nokia maintain its heading and come out on on the other-side of Windows Phone 8 stronger than ever, or will the company simply fold under the increasing pressure of the mobile segment?