Almost nothing has gone right for Nokia (NYSE: NOK) over the past year. And while third-quarter results were better than expected, the numbers offered very little to cheer about.

Revenue fell 13% to 8.98 billion euros. Adjusted operating profit fell 60% to 252 million euros. Overall, Nokia lost 68 million euros -- far better than the 229-million-euro loss analysts were expecting, Bloomberg reports. The stock rallied more than 6% on the news. Color me concerned.

Why? A slimmer-than-expected loss means nothing when the top line is fading also. Nokia's lone bright spot -- unit sales of dumb feature phones, which rose 8% year over year -- is also where it is most vulnerable as a business.

Think about it. As my Foolish colleagues Ron Gross and Joe Magyer point out here, there's nothing so unique about a Nokia feature phone that can't be replicated by Asian competitors such as Samsung and LG. Meanwhile, higher-margin smartphones are failing to catch on as fast as shareholders would like.

Unit sales of smart handsets fell 38% year over year as Nokia transitioned to a new operating system supplier deal with Microsoft (Nasdaq: MSFT). The first handsets featuring Windows Phone 7 are expected to be unveiled next week.

For shareholders' sake, I hope the new NokiaSoft smartphones prove alluring to buyers. But with Google (Nasdaq: GOOG) having just introduced a more advanced version of Android called Ice Cream Sandwich for its forthcoming Nexus Prime handset, and with Apple (Nasdaq: AAPL) setting records for sales of its new iPhone 4S handset, a smartphone-fueled recovery isn't likely in Nokia's future.

Do you agree? Disagree? Please let us know what you think about Nokia's prospects using the comments box below. You can also keep tabs on the wireless industry by adding any of these stocks to your Foolish watchlist: