Along with the soon to be released Motorola X phone and with a new RAZR Ultra family of devices coming to Verizon later this year, it seems Google is preparing an ultra-low-end smartphone for the emerging markets, where people can't afford to buy more expensive smartphones, and where they tend to still buy feature phones instead.
The new phone is apparently codenamed Motorola DVX, and should also be released later this year. I think this strategy of focusing more on mid-range (X) and low-end (DVX) with the renewed Motorola company, makes a lot of sense for Google, especially early on. Google needs to catch-up to others in terms of market share, and they can only do that quickly at the low-end of the market, by selling these devices to potentially billions of people in the next few years. This way Motorola actually has a shot of becoming the #1 smartphone company in terms of market share.
Plus, this goes well with Google's strategy of launching those Loon balloons, and launching other type of Internet services in many countries. They could sell these Motorola Android smartphones to the same people who get Internet from them. My guess is the Motorola DVX is definitely going to be an under $100 smartphone, and possibly even under $50.
It's certainly not impossible. We've seen Android smartphones that cost this little from Huawei, too, being sold in Africa, and that was last year. Of course, I think Google will want to use better components, and it might be why they want to focus on making Android work better on low-end devices with a future version (either 4.3, or 5.0). After Android 2.3, Android has become heavier and heavier on low-end devices, and I'm glad that Google will have a horse in the race at the low-end now, because it means they will be optimizing Android that much more for hardware from now on.
I don't think Google should ignore high-end devices at Motorola either, and I doubt they will. They need "halo" devices to make the tech media and tech savvy people be very excited about Motorola. Low-end and mid-end devices don't do that as much. But I do think it's smart for Motorola to focus on this part of the market right now, at least until they get some decent market share and revenue. Then, they can focus more on beating the best of them at the high-end, too, which might be as soon as next year (if you don't count the upcoming RAZR devices).