From day one, Android represented some freedom for OEMs, they could modify the operating system adding functions or tweaking some settings as they desired so it better suited the hardware that was being developed. With the Android One program, Google wanted more control over some devices that were targeted for emerging markets, it was kind of a Nexus program for low-cost devices. Google would be the one who take care of updating the OS and they included some reference designs or minimum requirements regarding hardware, such as double SIM capability, FM radio and a memory card slot.
The program was announced in June 2014 during the Google I/O event and it was launched in India around three months later. Karbonn, Micromax and Spice were the first OEMs to release Android One phones, while better known brands like Acer, Asus, HTC, Lenovo and Panasonic were going to release some more phones within the program afterwards. It's been more than six months since the program was introduced and there's no word from these makers about additional hardware for Android One, so their "interest appears to have stalled", as reported by the research firm CCS Insight. This initiative has expanded to other countries like Bangladesh, Indonesia, Nepal, Pakistan, the Philippines and Sri Lanka and some small OEMs from those countries have been making devices but still, it doesn't seem to have the impact that Google expected. The reason seems to be that while $100 was almost an unthinkable price tag for a smartphone, more and more devices are in that price range nowadays.
Smartphones in the $100 price range are usually nothing to brag about, but the ones that use Windows Phone as operating system have been very successful due to the fluidity of the OS even in limited hardware. Other companies have made some inexpensive hardware too, and while some users will see the benefit of having the latest version of Android first, some will prefer the customization made by the makers, the benefit in both cases is that they get to use Google services, so the objective of the Android One program would seem to be to show users from emerging markets the benefits of the operating system on low-cost smartphones.