This is a bit of a bad sign. It means Microsoft won't have their own AOSP-based product. Android apps and ecosystem elements will always be second priority, no matter what any management claims. This makes it less likely that "mobile first, cloud first" actually means something different from "devices and services." If Windows Phone fails to gain altitude, it will drag the rest of the strategy down with it.
It isn't just that Nokia X is dead. This says they're killing of all of what use to be "Smart devices" - which is/was the feature phone division. So that includes the Asha series, etc.
http://www.microsoft.com/en-us/news/press/2014/jul14/07-17an...
tl,dr;: - Nokia X is dead - other Devices departments are not affected/the effect is limited