Why it isn't Microsoft holding back Nokia
Lets start by saying that everything that I am saying is based off past performance. I believe that by looking at how Nokia performed in the past, I can deduce trends and predict how they will perform in the present day in an alternate timeline when Nokia didn't go with windows phone.
Lets look at the hardware first shall we? People often complain that Microsoft is holding back Nokia's hardware capabilities. That if it wasn't because of Microsoft, Nokia would be implementing quad core chips and 1080p screens. However, if we looked at how Nokia performed historically, I would actually say, that if it wasn't because of Microsoft, Nokia's hardware specs would actually be worse than what they currently are!
Back when Nokia was king, they always underspecced their devices. Look at their releases in 2009, the Nokia n97 used a 480mhz arm 11, with 128 mb ram, no 3d graphics capabilities, tiny system disk (think of it as Symbian's C: drive) and a resistive touchscreen. Compared to the HTC HD2, also released in 2009, you can see how ridiculous the n97's specs were. The HD2 had a snapdragon clocked at 1ghz, 576 mb ram, a graphics chip, and a capacitive touchscreen.
Nokia apologists will usually say that Nokia's low specs were because Symbian didn't need better (false, the n97 lagged like crazy, web browsing was horrible). Truth was, it wasn't that Symbian didn't need or didn't support higher specs (Notice how the Samsung Omnia HD and Sony Ericsson Saitio both had Arm Cortex cores, 256 mb ram, and a 3d acceleration chip, the Samsung even had a capacitive touch screen). Nokia literally skimped on the specs to increase their profits and simplify their supply lines. Hell, the n97 (the top of the line flagship) shipped with the same internals as the 5230 (a cheap 99$ off contract smartphone). The specs were acceptable on the entry level 5230 (the 5230 is actually the world's best selling smartphone ever), but for a top of the line flagship? Those specs were pathetic!
Software wise, a common complaint is how Microsoft is slow to improve their software, and how WP7 users never got the WP8 update. Nokia did a LOT worse than Microsoft ever did. First of all, consider one of the key strengths of Windows Phone. At least Windows Phone is smooth and stable. Arguably, smooth and stable are too traits that Nokia never, ever managed to succeed in. Almost every version of Symbian starting from he N-Gage was in a horrible condition at launch. The n8's launch firmware was so bad, Nokia had to come out to apologize for how bad it was, and honestly, Nokia doesn't really "improve" their software, its always 2 steps forward, 1 step back. The n8 eventually got more usable and stable after a few updates, but than, with every update, the camera quality just dropped. The firmware with the best camera quality was actually the launch firmware. As for the n97, it had great battery life, but that was probably because its software was so bad, it crashed every time you tried to do anything on it! The updates improved the stability, but killed the battery life. Finally, the n96 and c7 launched with their killer features not even included in the software! The c7's launch firmware couldn't even use the NFC chip, it was only month later did NFC support come in with the next OS version.
When it comes to OS update speed and OS upgrades, Nokia usually did horribly. Complaining about how two different flagships launched with the same OS version (like the 920, 928, and 925?). Well, its not the first time Nokia did that, the n8 and e7 both launched with S^3. As for updates between major versions of OSs, Nokia never did that. It took months for the next update (Anna) to come out, and because Nokia doesn't care about specs, Symbian Anna devices had the same poor specs as the Symbian^3 devices. No S60v5 device got S^3, and you will see that it is the same with all of Nokia's previous and current products. The Asha 311 will not get the "new asha" software as seen on the Asha 501.
People here always talk about how Nokia would be doing so much better with some other OS, whether it is Android, Symbian^4, Meego, or WebOS. But lets be honest here, based on their past performance, its a good thing that Nokia went with Windows Phone. At least they have to keep with a hardware baseline (hell, when they first adopted windows phone, there were talks that Nokia was trying to put a cheapo STmicro chipset into the Lumias instead of the Snapdragons). You can also be sure that you will not get the next major update.
I'm willing to say, that if OPK still ran the show, and Nokia used Android or Symbian, their 2013 flagship would be running a 800*480 screen, Omap 4 CPU, 512MB RAM, 41 MP camera (camera was the only spec Nokia never skimped on), and a laser pointer, IR blaster, thermometer, and toaster packed in (because Nokia has always liked a long feature list)