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A cut-price Windows Phone 7 (WP7) handset could be on the way, the head of Microsoft’s mobile wing revealed, in a move that is sure to ramp up pressure on Android in the low-end smartphone space.

Addressing crowds at this week’s worldwide partner conference, Andrew Lees said he anticipates that a $100 (£60-odd) smartphone powered by the platform will be on the market as early as next year.

Lees claims that the cut-price take on what the OS offers will be made possible by the rapidly falling price of components, as well as a relaxing of the scrupulous hardware requirements the Big M has hitherto imposed on manufacturing partners.

Windows Phone 7 Mango

He stated: "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.”

His comments come after Nokia earlier this year inked a historic deal which will see it produce WP7 handsets. Prior to the agreement, the Finns had only ever made mobiles powered by its own Symbian proprietary platforms.

Of all the WP7 third party handset manufacturers, it’s Nokia who are thought most likely to drive the cost of WP7 phones down in a bid to regain market share in the mid-range mobile market it used to dominate.

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