Microsoft's president of Windows Phone division, Andrew Lees, told an audience at the company's worldwide partner conference that he expects Windows Phone handsets to be available from as little as $100 in 2012.
The drop in price is likely to come as a result of downward pressure on component prices as well as more flexibility from Microsoft when it comes to the minimum specification of Windows Phone smartphones.
Currently, Windows Phone 7 requires a Qualcomm Snapdragon system on chip, 512MB RAM or more, at least, 8GB onboard storage, a 3.7-inch WVGA capacitive touchscreen, Wi-Fi and a five megapixel camera. Altering any of these minimum specifications will push down the price of the handsets.
Lees said, "If you look even at the price of smartphones, a year ago all smartphones cost over $400 when they left their hardware manufacturer. Today, they're down to about $200, and next year, a smartphone that can run something like Windows Phone 7 will actually be down to $100 to $150".
Microsoft has also added to the number of handset partners with the likes of Acer, Fujitsu, HTC, Samsung, LG, ZTE and Nokia set to launch Windows Phone smartphones by the end of the year. We suspect that Huawei will be the next to join in with Android partners Motorola & Sony Ericsson monitoring from the sidelines.
We've noted over the past month that the prices of Windows Phone 7 handsets in Europe have fallen significantly; the LG Optimus 7 E900 for example can be had from around £160 although the price drop could well be down to a forthcoming refresh in product lines as Windows Phone Mango is rolled out.