The line in the announcement about pushing these devices into new pricepoints actually gives me some hope for the marriage. IMO, the next phase of the smartphone race will not be about having the hottest high-end smartphone - I think the winner will be the one that can make a smartphone platform pervasive on entry-level phones.

If Nokia and MS get WP7 on every entry level Nokia, they might be able to disrupt the high end players and bring quality to the low end that Chinese competition will haage trouble matching.