"a gap where nobody actually lives."

Or how about a gap where over three quarters of the Earth's population lives?

Take away the operators' subsidies, and the cheapest "Budget Android Job" is four times the price of either of these handsets, and has poor talk time, questionable build quality, and very likely no Dual-SIM support. And four times that €35 price is a lot of money in a country where you can get a decent meal for €2.00.

This is primarily a voice phone, but with added internet connectivity and instant messaging support. No 3G because there's limited 3G infrastructure in the places these will be bought.

There is a niche for these in markets like Western Europe too: there's a small but significant minority of customers who want a purely voice-call phone, or just something they can rely on to still be working even after a week of use. Also, there are people, even in "rich" nations, who cannot afford three-figure sums for a phone. They mightn't hang around in your local Starbucks (and this is one of the Starbucks USPs, but not one they explicitly mention), but they're out there.

Re: "a gap where nobody actually lives."

You're still coming at this from a European perspective: assuming that people are buying what you see as a "cheap" phone because they don't want access to the web, Facebook or IM service. That's not where these will sell. (Although watch out for them in Tesco, who do a nice trade in cheap unlocked handsets). Phones like these two are offering access to the net for people who's budget did not stretch to that before.

An example of where this is aimed: India. This new Nokia 112 costs, before tax and subsidy, the equivalent of five or six meals for two in a casual-dining restaurant. In UK terms, that puts it at the equivalent of £200. Do the same sums with the price of an iPhone or high-end Android (around €450 before tax and subsidy), and see where it lies in the market.

The press launch for these two phones was in Pakistan -- not London, Berlin, San Francisco or Helsinki. That should give you an idea of the markets they're aiming for.

Re: No flip-phones!

Motorola should never have stopped making the V3. Upgrade the hardware as tech improves, keep the form factor, and they'd rake it in.