Opportunity: Microsoft can take over Android's lower end (AOSP)
Microsoft has an chance to take a lead role in the Android Open Source Project (AOSP) burgeoning market by providing OEMs with a complete software smartphone package based upon Microsoft Services. The Nokia X could be the opening salvo, if successful, in luring OEMs like Vivo and Oppo into standardizing their ASOP devices, away from the 'Powered by Android' (PBA) Alliance.
To achieve this, Microsoft would have to target two ends of the AOSP market. First they'd have to have a smaller footprint then 'Powered by Android' devices, and lower hardware requirements then PBA devices to enable these OEMS to continue to provide devices under the $100 price point.
For example, you just need to look at the most recent quarter's smartphone market share to see that 41% of China's Android sales are from AOSP devices that have no Google services. This is the fastest growing smartphone segment in China up 20% YoY. In fact Nokia recently launched the Nokia X android (AOSP) device which opened to 10 million pre-orders at JD.com.
Secondly, they'd have to loosen the hardware requirements in order to allow OEMs to innovate, something that's been lacking from their Windows Phone efforts.
For example, AOSP phones hitting the market have some higher specs than 'Powered by Android' devices. The first-to-market QHD ( 2,560 x 1,440 pixels ) are AOSP devices, as there less restrictions for OEMS like Vivo and Oppo. Look up the Vivo XPlay-3S or the Oppo Find 7 to see how this AOSP spec race is moving ahead of where Google's OEM partner's are currently residing.
So there is a huge opportunity here for Microsoft if they are willing to take it. Currently, Google is currently moving Android towards a higher standard, and at the same time it is making its Google services mandatory. I think this move will move the prices of Android devices up, provide a better user experience, but require more RAM and storage, something that drives up the price to OEMs.
If Microsoft can release a build with lower hardware requirements, i.e., less RAM, smaller footprint, and provide looser restrictions to allow the OEM's to innovate, then they can take over Android's AOSP market.