1. Its early days for the smartphone market.
2. Nokia+Wp7 has a good chance of not flopping due to Nokia's reach, relationships and repeat customer base in countries outside of USA.
3. They have lots of cash
4. They've done this before (Xbox entered a fairly mature, very competitive market)
5. They have platforms they can leverage/integrate more (Xbox, IE, Windows 8, Facebook)
6. They haven't targeted the low end market yet.
The mass market (people not like us) still views Microsoft and Nokia as good brands so in that aspect Apple and Google phones don't have the same brand equity that keeps them super loyal/rabid to like us geeks.