In comments to analysts and reporters after announcing massive layoffs, Nokia CEO Stephen Elop spent quite a bit of time talking about his efforts to shore up Nokia's marketshare in the low end of the market. He discussed expanded efforts with Windows Phone in China, but beyond that Elop and CFO Timo Ihamuotila pointed out that Nokia believes that the phone that combines the lowest-possible price point with a full-touch experience had a good chance of winning in the market. Android is obviously a good descriptor of such a product and Elop noted that Nokia was already feeling pressure from low-end Android devices.
That time crunch might explain why the company has reportedly decided to focus more on S40-based Asha phones than continue to develop the rumored Linux-based "Meltemi" operating system for the low end. All Things D says that sources tell them the project has been "shelved" and Elop himself was made to address the rumored OS during the call. Asked directly about Meltemi, Elop responded:
We’ve never publicly used the term than you mentioned, so we don’t have any specific comments a specific engineering effort, although it is the case that we have cancelled certain specific engineering projects as part of our changes.
Rumors about the OS first surfaced last June, when Elop mentioned Meltemi in conjunction with another project, "Clipper." Whatever it may have been, stack it up alongside the many other mobile Linux efforts that haven't seen commercial release, let alone success.