Microsoft is not ceasing development of Nokia X series of Android based smartphones, if recent leaks are any indications. As per a screenshot of AnTuTu benchmarking score posted on Chinese site Baidu, Nokia X2, the Nokia X successor is in works with 1 GB RAM, Snapdragon 200 processor.
Another image claimed to be render of Nokia X2 shows windows like homescreen button along with a back button. The device has dual-color body representing a half-half mix of Android (Nokia X) and windows phone.
If the above images is an indication Microsoft may be trying to bring the Nokia X design and software as much close to Windows Phone experience as possible keeping smooth upgrade from Nokia X to Windows Phone in mind.