According to The Verge, Nokia has been building a low-end Android phone. The project is code-named 'Normandy' (is that a reference to D-Day?) the project is also known under other names, and The Verge has an insider source which describes the project as "full steam ahead" with a planned 2014 release. The picture above was posted in November by @evleaks and is described as the "Nokia Normandy".
However, it's unclear how Normandy will proceed "full steam ahead" now that Microsoft has bought Nokia's Devices and Services unit. The sale was announced in September and is expected to close in the first quarter of 2014, and will combine Microsoft's Windows Phone with its largest hardware supporter. As part of the deal, Microsoft will also acquire the 'Asha' and 'Lumia' trademarks from Nokia, Nokia will retain its own brand and Microsoft will license the brand for use with Nokia's current mobile products.
The Verge also wrote that Normandy uses a "forked" variant of Android not aligned with Google's, which could explain how the low-end device could be launched despite Nokia's ties with Microsoft. It might be akin to how Amazon forks its Kindle Fire tablets, which run Amazon's own version of Android which runs its own App Store, with no links to Google's Play Store.