Yes, they were. These bastards destroyed the biggest European tech company for nothing. And Nokia had all the services required and the technical know-how to rival Google.
All credit to Microsoft, but as an ex Nokian my feeling is that Nokia killed itself unwittingly when it bought NavTeq. Because of that sunk cost, they were unwilling to adopt Android as it would invalidate the acquisition, with the leaders responsible still at the reins. Life with Android would be far from the heyday of the past, but living is living.
I was using the N900 when it came out and at that point Android was in no way superior to whatever Nokia was doing. Their main misstep was choosing Windows Phone and shipping the N9 as a dead-on-arrival product. Nonetheless the UX was pretty ahead of its time and we could have had a real Qt based Linux phone OS
I love my N900 and N9 but by the time they were released Android already had unstoppable momentum. It's all about software developers' uptake of the platform. Maemo didn't have it, WP had barely more, but neither was enough to compete. I think Nokia could have been the peer of Samsung as an Android OEM. Their logistics was arguably better even though they didn't have the vertical integration of Samsung.
Edit: if they'd not had the risk-averse management a few years earlier the N770 could have developed into a competitive smartphone platform... But managers were fixated on candybar phones and endless variations on feature phones instead of reaching for their future.
Too be fair, it was a big bet and at that point it was Nokia's only chance of remaining at the top. It they had used android at that point in time, they would have started from the bottom in the race for the android domination that was already seeing some large companies fail. Going with Android that late would at best turn them into another Sony Ericsson unless they executed everything perfectly (which wouldn't happen with the large amount of in-fighting the company had). Going with Windows Phone would be all or nothing. Only time showed it ended up being nothing.