Nokia was huge as an organization and parts of that organization recognized the threat early on. The problem was at the board and executive level. These people had a blind spot for software. They thought they were still in the electronics business. Lots of people with an electronics and radio background. Not a lot of people with software competence. And they had bought into the notion that Symbian was going to magically fix all their problems.

A lot of effort was spent on looking for other solutions. And one of the things that was good (Linux) around 2005 was actually quite close to displacing Symbian as the key future proof replacement for their legacy platforms. Symbian was just rolling out for a few years and they had made a big investment in that. And management (those same people with a huge blind spot for software) backed the wrong horse.

Linux never really died in Nokia but it wasn't allowed to prosper either. Devices were cancelled or repurposed for Symbian. This happened to the N8, for example. By the time they switched to windows phone, they actually had two Linux platforms (Meego and Meltemi) and an Android phone in the works as well. Meego had one last product phone launch and the team and platform were killed in the same week. Any devices for that platform were labeled as developer phones. Nokia never marketed them as a consumer phone. Meltemi never saw any product launch at all; it was aimed at feature phones. Both were good ideas but poorly executed. Nokia killed them along with Symbian in order to back windows phone. Classic baby and bathwater situation.

And MS ended up killing the one Nokia Android phone that was launched shortly before they acquired the whole phone division. Kind of a desperate/ballsy move. I suspect Nokia did this as a stick to ensure MS followed through with the acquisition. That was their "oh we could just switch from windows phone to Android unless.. " move. Nokia was at point the only OEM that still believed in Windows Phone.

MS killed the whole division shortly after Satya Nadella took over and was sorting out the mess left by Steve Ballmer. The iphone was solidly in charge by then and the rest of the market was Android. Courtesy of lots of Linux contributions by the Meego and Maemo team.

"Cingular has allowed Apple to launch a device with WLAN and inbuilt services"

At that time, the carriers controlled so much of the cell phone experience. We certainly would have loved to have launched Palm Treo phones with WiFi radios, but our carrier partners wanted the only way to get data in and out of the devices to be through their monetized data plans. They also wanted to control what you did with that data so they could charge for their own email or messaging systems or web portals. The same applied to app stores. Palm OS didn't have a unified app store at that time, just sideloading and some third-party methods, and some carriers had started making their own stores where you could buy apps billed through your cell phone bill. They hated the idea of a platform owning that, and I expect that was part of the reason Apple originally released it with no app store. They needed the phone to be a massive hit in order to gain the power to also bypass that wall that the cell companies put up.

Palm did benefit from the iPhone launch -- it had us uplevel our efforts away from the post-Palm OS phones that we were in the middle of developing that were aimed at the RIM market and instead try something radical with webOS, and when the Pre launched, it actually had WiFi on board, although the Sprint-exclusive Pixi phone lacked WiFi due to carrier request. There was some momentum there for a while, but then HP bought us, hit its own set of brick walls with carriers, and ditched the hardware business shortly after Apple started launching on other carriers.

Evidently, Nokia executives knew well in advance what the iPhone could do to their company.

Evidently, they knew they needed to do "something" to avoid an implosion of their mobile-phone business.

Evidently, despite their prescience and best efforts, they were unable to avoid disaster.

It's as if they were in the Titanic, and saw the dangerous iceberg well in advance, but somehow were unable to turn the steering wheel and change course.

“The 1% volume share target could translate into 4% value share, taking ~ 30% share of the >300 € price Band”

That’s Apple’s superpower in a nutshell - get the majority of the profit in the market, while everyone else battles each over over market share (and earn low margins in the process).