If Apple can succeed in making a cell phone that fits that price range (albeit we may have to sacrifice certain features like 4G or facetime).
According to analysts:
"Beyond helping address a potential saturation challenge, we believe that the possible introduction of a lower-priced iPhone is strategically important for Apple, and we are surprised the company hasn't introduced a lower priced offering previously," he writes in a research note. "We believe that Apple’s ultimate intention is to be the dominant smartphone vendor globally, and that the company has market share aspirations that are akin to its iPod business (rather that its Mac business, where it faces a sticky Wintel platform.) Given these aspirations, we are surprised that Apple hasn't moved sooner to introduce a lower priced offering that could help secure a more dominant installed base. After all, the smart phone world is a platform war, where first mover advantage and scale matter."
Although A cheap iPhone doesn't look plausible at the moment one can only hope that Apple will indeed develop one in the future.