Just for a funny anecdote, an Android user at.my work asked me what virus scanning software I used on my Windows Phone 8. I laughed because I thought he was making fun of Windows Phone. Turned out he was serious - his Galaxy had gotten two different viruses and he was running virus scan on it. I told him that ironically Microsoft's market share wasn't high enough for malware authors to target.

Android certainly does not have lower system requirements than Windows Phone. I mean, it could run on lower spec hardware... for some definition of "run". Mine are both last-gen devices, but my Lumia has half the cores and RAM as my Galaxy and runs twice as smoothly.

I hear later versions of Android did get smoother on flagship phones, but I don't know how or if that translates to lower-end devices.

Now that Microsoft is buying Nokia, they will be making their own phones. I think the idea is that they will operate that division at a loss to undercut their competitors and gain share in the middle or bottom of the market.

Samsung and Apple both need to make money on their phones. Microsoft does not. Both Bing and Xbox were operated at a loss for years; it paid off for Xbox but not (yet?) for Bing.

These Android manufacturers are generally not just shipping vanilla Android and have development costs on top of patents and licensing. They do this because owning the software stack gives power, and they believe it distinguishes them (although usually makes the product worse than stock Android). Microsoft want to own the software stack so shipping Windows on Nokia phones makes sense. It wouldn't make sense for other manufacturers unless they don't mind loosing power over the stack (which Samsung, Huawei, Amazon etc. don't want).

I agree with your points regarding limitations with Windows Phone. Just because an opportunity exists doesn't mean that they will succeed. Although I am unconvinced that the app market is that important. A few key apps are important, but Android app purchases lag heavily behind iPhone, and it is reasonable to suggest that feature phone users will lag even further (especially without a locally integrated payment system in developing markets).