If we're honest, this is hardly surprising. Before Nokia made it's commitment to Microsoft, they were a company at the forefront of phone technology, including their cameras. However, what this does actually do is beg the question of why they opted for Microsoft. I'm without a doubt in my mind that if they were making Androids right now, they'd be dominating.
To be profitable in the low cost game you need to have market share. Being a late comer to the Android game, Nokia would be hard pressed to make a profit with Android phones.
Nokia instead is gambling with MS to capture the "buy-in" market using Microsoft's enterprise. This market was previously known as Blackberry's.