A few years ago, I got annoyed with a Google phone (Nexus something I think) that broke, given how expensive it was, and replaced it with a Motorola Android phone that was well under $100. I didn't really sacrifice the basic necessities - sure, the screen was small and side by side with a high end phone obviously less bright and lower resolution, but providing you didn't care about processor intensive apps/games, it served the same purpose.

Edit: Of course, I am assuming there wasn't a substantial subsidy from somewhere, but from my point of view, it didn't have a contract attached.