If you think entry level smartphones are cheap these days, we could potentially see an all time low for the price tags of upcoming entry level Android devices by years end. ARM who makes a handful of different CPUs thinks that quite possibly within the next few months we could begin to see Android devices come in at prices as low as $20 with no contract. Some obvious notes here are that the devices most likely wouldn't be released within the U.S. markets because we already have all sorts of deals on entry level Android smartphones, whether it be carrier subsidized with 2-year contracts or prepaid models. These dirt cheap $20 Android phones will more than likely be emerging market based, and be available unlocked as most markets outside the U.S. don't have carrier contracts and subsidized pricing on devices.
A cheap $20 price point and emerging market releases are also bound to come with underwhelming specs and features compared to what were used to. The target group for these devices though are people who can't necessarily afford high priced and high end flagship phones, so those lower end specs also won't likely matter as much to those who would be purchasing them. According to Anandtech, these low priced devices would support only 2.5G networks, and come with other specs like a single-core Cortex A5 CPU.
Besides offering up cheaper options to people in emerging markets who have the need or want for a smartphone, the low end prices could help to force lower costs on devices elsewhere and for mid-range devices as well. Compare these potential $20 phones with a Cortex A5 chip to the ARM11 powered original high priced iPhone back when it launched, and you can easily see how far mobile computing has come. Although we may never see a $20 device here on U.S. soil. However entry level prices are starting to drop here as well, as Motorola has shown us that even entry level like with the Moto G, can be decent and come with a low price tag which isn't only helping to lower the prices of smartphones but also redefining what it means to be "entry level."