Nokia really is working on an Android phone, according to sources quoted by both The Verge and All Things D. The big question now is whether Microsoft, which is in the process of buying Nokias handset division, will kill the project.

The plan, according to those sources, is to use a forked version of Android that strips out the Google services, much as Amazon has done for its Kindle devices. According to Ina Fried over at All Things D, Microsoft may find this a more palatable approach to tackling the low end of the market than watching Google-ified Android phones continue to take over.

Im not so sure that Microsoft will settle on this approach in fact, I would say its a far less likely outcome than Microsoft killing the project once the takeover goes through in early 2014.
More at Gigaom...

--jeremy