At a recent Tech-Ed event in India, Microsoft's Director developer tools for Microsoft India's Visual Studio - Sudeep Bharati - said that Microsoft plans to release a kind of low-cost Windows Phone 7 version for developing markets. According to Bharati, "the low-cost version of the phone will have a different chassis than version 1 to be launched by 2010 end". While it's expected that Windows Phone 7 will feature (at least) three different - so called - chassis (but today only Chassis 1 is confirmed), the emerging markets chassis might have reduced spec-requirements which also includes a smaller screen and will thus be priced lower to suit developing markets.
Bharati said: "We are in talks with OEMs to gain their feedback on a new chassis."
As of today, it's confirmed that Windows Phone 7 Chassis 1 smartphones will feature a a WVGA capacitive touchscreen, at least a 5 megapixel autofocus camera, WWAN (GSM, UMTS or CDAM), WiFi, Bluetooth and a minimum amount of memory (because Windows Phone 7 smartphones won't support memory expansion through microSD cards).
At the moment, it's not said how the emerging market Windows Phone 7 specs might differentiate from the regular Windows Phone 7 specs but Microsoft confirmed before that Windows Mobile 6.5 is continued and offered as Windows Phone Starter Edition in developing markets as well. If an emerging market Windows Phone 7 becomes true, it looks like another serious Windows Phone fragmentation - at least in developing markets.
Cheers ~ Arne