I suppose you are right here but this would be true of any smartphone platform, even Symbian. It's not going to happen because Asha is really a feature phone. The crux is whether a low priced WP7.5 phone can compete with a low end Android. I seriously doubt it as even a low end Android has less restrictions, is more customizable and enjoy a bigger app store than any WP7.5 phone.

It's not just the cost of the phone but the whole ecosystem. One needs a PC capable of running Zune and data connections for both PC and phone to be able to use the phone effectively. In developing countries where data is expensive many users depend on bluetooth file transfer which WP7.5 lacks. This OS has been designed for consumers in rich Western countries where data is cheap and most users have 3G contracts. The wi-fi even shuts down when the phone sleeps and transfer background data usage to 3G.