I think the first faceplant was to totally misjudge Apples ability to turn the iPod into an iPhone.
Anyone with a clue could tell that it was going to happen, but that it was packaged so good was probably a surprise for all.
Steve Jobs had a passion for product design, and that passion included the software and UI.
Anyone that have uses an old Nokia or any other pre-apple "smart" phone would notice rather soon
that there is no passion involved at all. They were (and are) made by people writing "use-cases" and
gantt-charts, and the "design" was something that regarded the plastic shell.
There were probably hordes of proud and passionate software developers, but my guess is that there was
no creative process, no feedback and no iterations. Just project plans and use case documents.
I have no idea, but I have always figured that how things worked at Apple was that Steve said that he wanted something,
a team of developers and ui-designers made version 1, Steve basically said that they could do it better, and eventually at iteration n, Steve was happy.
The funny thing is that you probably don't need Steve; anyone with a mild disposition for design could say "no" a couple of times, and
let the developers make awsome stuff, while having fun.
Anyway, having lost their massive market share, Nokia hired the microsoft guy to fix things. And what else can really happen after that?
Unfortunately, Nokias engineers were probably more inclined to focus on Linux and Android phones, if not for nationalistic reasons, but
as long as the use-case guys rules, they will not be able to deliver something that does not suck. Letting microsoft piss away millions on
gui design for you, may not be a bad choice given their circumstances, but they could equally well have let google piss away the money...