First-time smartphone users who are in the market for cheaper devices with Internet capabilities should look no further as mobile phone and tablet maker Datawind is set to launch a device that could just be the world's cheapest smartphone to date.

Priced at only $15, the new phone is scheduled to hit the stores in India on Dec. 28, the birth anniversary of Dhirubhai Ambani, the founder of Reliance. The latter teams up with Datawind in a move to launch an affordable phone by the end of 2015.

"Our target is to bring a smartphone under Rs 1,000," said Suneet Singh Tuli, CEO of Datawind. "The new smartphone will be a Linux variant and consumers can get 12 months free Internet browsing."

The upcoming $15 smartphone will be priced at 999 rupees in India (AU$20 or £10) and will likely support 2G connectivity. It's definitely a non-Android device and instead, it will be based on Linux.

The two companies are aiming to sell the handset to customers who are upgrading to their first mobile device. As revealed from the research conducted by IDC, around 65 percent of the handsets sold in India are made up of feature phones towards the last quarter of 2014. It has noted how the trend of upgrading among users seemed to have dropped from the 78 percent that was recorded in the beginning of the first quarter of the same year.

"There are 900 million mobile phone subscribers but only 18 million broadband connections are available," said Tuli. "This gap segment is our priority. We create products that create the optimum balance between usability, performance and affordability for the Indian population. Instead of the small niche of high-end tablets and smartphones, our focus will continue to be on affordable devices that can empower the masses of India. Future specifications will include expansion to 3G and 4G networks."

According to Tuli, the phone's low-cost feature was made possible through the sliding prices of certain device parts such as processors and memory. Currently, the company is in talks with chipmakers from Taiwan and China.

"We want to replace feature phones with low-cost smartphones and hope to shrink the feature phone market base to 5-10 percent from the existing 60-70 percent in the next one to two years," adds Tuli.

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