Even after introducing the company’s cheapest yet Windows Phone, Nokia CEO Stephen Elop acknowledges that the company still has work to do to compete with the lowest end of the Android market.

The Lumia 520 sells for around $180, roughly twice as much as the cheapest Android phones.

“Yes, we do have to continue to broaden the Lumia,” Nokia CEO Stephen Elop said in a roundtable with reporters on Monday. “There’s definitely an opportunity to push to even lower price points.”

At the same time, Elop said he is cautious of sacrificing capability in the name of cutting price. Many of those low-end Android phones, he says are running older software and can’t run the latest programs.

“It’s a careful balance,” he said.

Nokia is thus far trying to position its Series 40-based Asha series to take on the low-end of the Android market. Those devices, he said, contain proxy browsers and other technology designed to limit data use for price sensitive customers in emerging markets.

For a time Nokia had a project called Meltemi that sought to introduce mobile Linux for low-end smartphones; however that project was scrapped in the middle of last year.

Although he has continued to express confidence in Windows Phone as the present and future of Nokia’s smartphone business, he acknowledged that establishing the ecosystem has been a greater-than-expected challenge, Elop said.

“I think it has been very hard,” he said. “The amount of effort to break through in retail has been harder than anyone estimated.”

Nokia, for its part, has started to find its stride with the Lumia 920, Elop said. That phone, with its wireless charging and photography abilities is starting to show what Nokia is capable of doing on top of Windows. “That gives me great hope for the future.”

Asked about whether there could be a wearable device in Nokia’s future, Elop said there is a definite rise in sensor capability beyond the smartphone.

“We think that’s a fundamental trend,” he said, declining to talk specifically about Nokia’s plans in the area. ‘These devices are sensing the world around you.”

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