Google's Nexus line is known for being pretty affordable. The company long ago stopped trying to release phones with the highest-end specifications. Instead, for the last couple of years, Google has focused on producing phones with powerful specs at a great price. Most users don't need the maximum level of power of which smartphones are capable, so why spend more than you must?
Google is taking that to the next level with Android One. Android One is targeting the developing markets where smartphone ownership isn't as prevalent as it is in developed markets. This means budget smartphones with stock Android and great specs. The sample device shown at I/O was manufactured by Micromax and comes equipped with a 4.5-inch display, dual-SIM support, SD card support, and an FM radio. This device will run stock Android, will have automatic updates (just like the Nexus line), and will cost less than $100.
The fact that the updates will be released automatically is big. It's so common for affordable phones to run older, out of date software, simply because the devices themselves are older phones. And though Google didn't go into too much detail on this, it did say that there would be minimum standards for these phones, which should help keep the experience above a certain level. Hopefully, that means these devices will have to at least be able to run the latest version of Android.
For now, Android One is focused on India, but other emerging markets will follow. Google didn't specifically say that Android One devices wouldn't be available in places like North America, but we're assuming the company would rather target budget shoppers with the Nexus line than these lower-powered devices.