The move is mostly likely a threat to Android phone makers, who so far have dominated the fast-growing, low-price smartphone market. Competition for low-end smartphone buyers is fierce: China's Xiaomi is poised to enter the Indian market, and Google also plans to launch a low-cost $100 Android One phone there as well.
As such, Samsung is most threatened by all this activity, simply because it makes high-cost smartphones (although it also has a range of cheap ones). Samsung's high-low strategy has given it 29% of the Indian market, according to Business Insider Intelligence.
Also threatened is Apple, which has been selling the iPhone 4 in India as an entry-level smartphone for about $245. Apple's low-cost phone business is minimal, however.
The threat is somewhat blunted by the fact that the Mozilla phone will basically be a web phone with few apps: It will have 1,000 apps or so, compared to the 1.3 million available in Google's Play store for Android.
The Intex Cloud FX will retail for 1,999 rupees ($33) in India as part of an exclusive deal with online shopping site SnapDeal. The device features an expandable memory of up to four gigabytes, slots for two SIM cards, Bluetooth and Wi-Fi.
The new phone runs on Mozilla's Firefox OS open source operating system, which the company is gradually rolling out across a range of phones and tablet computers.
The low-end smartphone market has long been seen by Mozilla as the perfect place for it to gain traction with its range of smartphones. In an interview with the Wall Street Journal, Jane Hsu, Mozilla's director of product, explained that "More than 70% of the phone users are still using feature phones. We understand that the obstacle and a barrier for them is cost and usability. India is the biggest market and we wanted to make our first launch for India."
Hsu goes on to reveal that the company is planning on using ultra low-cost devices to gain a market hold, remarking, "we are targeting to see if we can reach one percent market share (of smartphones), and that'll be a good beginning. We don't know when but that's our goal."
In an interview with Business Insider in May, Mozilla's chief technology officer Andrew Gal explained that the dominance of the iPhone and Android phones in the high-end market had forced the non-profit to look at creating cheaper devices. Deals forged with Chinese manufacturers have given Mozilla the hope that it could start producing $25 smartphones, although the new $33 model may signal that manufacturing costs are not quite as low as it initially thought possible.
Further announcements about low-cost Mozilla smartphones are expected throughout this week.