Word on the web is that Microsoft may be looking to create a different chassis or specification for developing countries. Most likely, this would result in devices with reduced screen sizes, less memory, and slower processors. As is expected, Microsoft will be looking to their hardware partners like HTC, and Samsung, to produce the low cost devices.
If the software inside the device is just as functional, then Microsoft may have a hard time keeping these out of North America. It seems like that they would make a good starter Windows Phone to help people get on the platform at a reduced cost and then possibly upgrade to more functional hardware down the road. Microsoft needs consumers across the world to adopt the Windows Phone 7 platform. A low cost device at home as well as in other countries is a significant step towards re-gaining market share.
Windows Phone 7 is expected to be available for “Holiday 2010” running on hardware from all of Microsoft’s hardware partners. The exact date of availability and pricing are still not known.