Their software has not "always" been lacking. T9 for example was a wonderful innovation, and looked magical at the time. They were destroying the competition back in the 90s thanks to great UI work on very limited devices.
They've lost the plot when they started to ignore the limitations of Symbian, probably because they had invested so much on it very early in the game and so it had gained almost 100% mindshare among their engineers. Then the iPhone came out and the leadership lacked courage to tell engineers that Linux was the future and they should all retrain RIGHT FUCKING NOW; instead there was a lot of internal politicking, keeping Maemo at bay and trying to put lipstick on the Symbian-UI pig.
Some of those layoffs are deserved, in a way, since resistance to change was coming from below as much as from above. Shame that it took an idiotic leader making the worst possible choices to make people see the error of their ways.
T9 was copied from Benefon, a smaller Finnish mobile company. Some of my friends had their phones.
EDIT:
Or at least they brought phones with that earlier to the market. Wikipedia claims it was invented by "Tegic".
Being good at developing new stuff == being good at copying new stuff and quickly delivering to mainstream markets. See also: Apple, Inc; Microsoft, Inc; etc etc etc.
It was the lack of vision. They kept doubling down on Symbian for 4 years thinking they can make it competitive with iOS and Android. It was the wrong decision.
They should've kept supporting Symbian, but focus on Maemo (or a new OS) from day one (after the iPhone launched). Supporting WP7 over Android will probably be the final biggest mistake that Nokia did.
Classic innovator's dilemma: The management made all the right decisions to avoid cannibalizing their own Symbian revenue. They just didn't have the courage to take the steps necessary to bet on the future.
They've lost the plot when they started to ignore the limitations of Symbian, probably because they had invested so much on it very early in the game and so it had gained almost 100% mindshare among their engineers. Then the iPhone came out and the leadership lacked courage to tell engineers that Linux was the future and they should all retrain RIGHT FUCKING NOW; instead there was a lot of internal politicking, keeping Maemo at bay and trying to put lipstick on the Symbian-UI pig.
Some of those layoffs are deserved, in a way, since resistance to change was coming from below as much as from above. Shame that it took an idiotic leader making the worst possible choices to make people see the error of their ways.