Zewede - $25 my not be the optimal price point, but as others have pointed out, there are different markets, networks, consumers, etc. The $500 smartphone and expensive data plasn are not going to meet the needs of many consumers that are not on the leading edge of technology. In fact, without subsidies, the average price of smartphones in the US would likely drop significantly.
I agree that the future lies in emerging markets, but there will still be a market within the United States and other more industrialized nations enabling growth and innovation for companies that can then expand the lower-end of their business models abroad in emerging markets.
There is no doubt that the business models for the phones and the data will evolve over time and possibly with government support. I think a better way to think about the announcements is that these vendors are targeting lower price points for entry level smartphones for emerging markets where this is likely to be the consumer's first smartphone and only internet device. All too often we think of the billions of smartphones in use in western countries and forget that the majority of future growth will come from emerging markets and consumers that cannot afford the current crop of superphones.
As an Indian, I also fully agree with your view that though the Indian customers are using their phones for data services , the revenues earned by Telcos are miniscule.
But since many a services in India have now become on-line with mobile support - such as bill payment. Carrying the railway, bus or movie tickets on mobiles, the data usage is slowly increasing and the Telcos can expect better revenues from their subscribers by usage of more data services.
Once any company produce firefox phones and want to sell at some profit (retails price > $25), they will very likely face the question from consumers "They (spreadtrum) said it is $25!!".
Defining the end-product retail price by chip vendors is, IMO, pissing off customers (phone makers). It is very strange because if you don't want your customers making money, why customers will use your chips?
Actually data plan are very inexpensive in these countries. There are so many players who provide service so the competition is also strong to get customers. Some of the plan I know of are as low as $2 per month and if you are ready to pay $5 per month rental post paid..you can get unlimited internet access. If you are just checking your emails or browse sites or use occassional GPS its very good. And I would be surprised to know if someone says we dont need internet access on smartphone, times is changing so are people. There are few small shopkeepers I have observed they keep chatting on facebook. Internet is for everyone whether rich or poor and trust me with so many service providers in market in these developing countries, everyone can afford internet. And its good for the society and technology.
Gone are the days when someone should feel why developing countrymen need internet access and how can they afford it.