Pretty much so. They continued with the clunky, sluggish and buggy Symbian for waaay to long.
Uh, no. As someone who actually USED a Symbian phone and wrote code for Symbian phones (for longer that I wanted to), the problem wasn't bugginess. The problem was that it was terrible to write code for. It took C++ and decided to spin it around and around until it made you want to throw up. They had their own notation, for pete's sake. But as far as bugginess goes? Android is FAR buggier and FAR more insecure than even Symbian circa 2006.
Not like this mattered much in regards to the top level story anyway, Nokia's CEO was desperate to push Nokia back into the US market again (they had always been solid in Europe), and figured teaming up with a very US-ish company like Microsoft would give them a market edge (as if they adopted Android, they'd be just another Android blah blah phone manufacturer competing with the rest of them...and Google itself). It turned out to be a bad call...Windows Phone is the latest in a fairly tainted line of mobile OSs and that taint still haunts all of the children of WinCE to this day. Every new regurgitation has something wrong with it that drives its users up the wall. Microsoft just never "got" mobile. And when it was too late, they started paying off bloggers to write good press about their stuff. Instead of doing what Apple and Google did...basically, imitating and building on the successful points and user interaction flow of previous mobile OSs, Microsoft was transfixed on making its users enjoy their own generally jarringly different user experience and flow. They always had to have things work their way, even if their way wasn't very practical. Mobile client OS design isn't easier than desktop client OS design, and there are way too many people at Microsoft that didn't understand this.
That said, if Microsoft decided to drop mobile, their shareholders would be furious. They'd lose a lot of stock value. The press would be terrible, PR damage control would be too much to deal with. They will continue to count on that handful of very headstrong people, typically older people, who have been using Windows for 20 years, refuse to ask anyone else's advice, and just conclude that Windows Phone would be the easiest for them to use. Then they get frustrated and complain about it at me. They may continue to ride that 10% of the market for the next 10 years if they have to, because quitting for them would cost them more than losing cash on it for the next 10 years. Just ask Meg Whitman over at HP about that one.
According to all the latest reports, there was no truth in any of the earlier reports.