Nokia 7xxx was fashion and experimental series and not a sign of failure. They were used to test features and target specific consumer segments. In that era it was common to launch large number of different models each year. 3-4 different series and different models in each series. It was how the old hardware-centric model worked. The phone fashion changed from year to year and Nokia was constantly increasing the market share.

When you move to smartphones as software platforms you produce basically the same phone hardware with 2-3 small variations. It was this transition that Nokia missed.