I think there's a serious gap between the Lumia 5xx and Lumia 9xx/1020/1520. Not everyone seeking an affordable phone has a budget-restriction of $100, I can go up to $350 off-contract, yet there's nothing compelling (besides last year's Lumia 920) in that price-bracket.
I reckon that there are a lot of people willing to spend a reasonable amount (i.e. $300-400) provided that they get value, and as was the case with L520 providing immense value at the low-end, Windows Phone can win in value at the mid-end.
The platform lacks a solid mid-end competitor, i.e. a phone touching the $350-mark.
My suggestion here would be to take the Lumia 720 and load it with the Moto G's specs, i.e. quad-core Snapdragon S400 CPU, an HD screen and 1GB of RAM. In addition, equip it with LTE and an improved version of the Lumia 920's PureView sensor with the PureView branding.
Offer this phone (e.g. 'Lumia 730') in an array of different colours, translucent or dual-colour Qi-charging shells, multiple memory options (16GB or 32GB), etc. and range it out from $350 to $400 off-contract. Not only would this device open up Windows Phone to a potentially bigger customer base, i.e. those looking for a premium phone without having to pay $700+, but it'll also build appreciation towards Windows Phone's hardware features. People will become accustomed to having PureView, Clear Black, PureMotion HD+, etc. and may seek to invest in that through high-end WP devices later.
Finally, the marketing opportunities around such a device are promising. You can use the PureView camera, Qi shells, different phone colours, etc. as a means to sell the Lumia 730 as something that speaks to the user's tastes and needs, as opposed to the off-the-belt Galaxys and iPhones. "It's the camera designed for your night out. It's the Instagram/Vine made for capturing those moments the way you saw them. It's Friday and we're going out, I'm going to take the Lumia [which is sitting beside a Galaxy]" Microsoft can also corner iPhone in the market it's aiming to carve out using the iPhone 5C as well as keep up with the momentum set up by Motorola/Google.
Better yet, if designed around Windows Phone 8.1 Microsoft then has a chance to really reign it in on the market. A $350 phone that gives you a taste of premium and the latest features, i.e. Cortana, will be of interest to everyone, even those tied into the iOS/Android market. I can see my brothers (iOS users) buying a Lumia 730 for the sake of having a Lumia 730, because it's cool and offers something without an inaccessible barrier-to-entry.
I reckon that there are a lot of people willing to spend a reasonable amount (i.e. $300-400) provided that they get value, and as was the case with L520 providing immense value at the low-end, Windows Phone can win in value at the mid-end.
The platform lacks a solid mid-end competitor, i.e. a phone touching the $350-mark.
My suggestion here would be to take the Lumia 720 and load it with the Moto G's specs, i.e. quad-core Snapdragon S400 CPU, an HD screen and 1GB of RAM. In addition, equip it with LTE and an improved version of the Lumia 920's PureView sensor with the PureView branding.
Offer this phone (e.g. 'Lumia 730') in an array of different colours, translucent or dual-colour Qi-charging shells, multiple memory options (16GB or 32GB), etc. and range it out from $350 to $400 off-contract. Not only would this device open up Windows Phone to a potentially bigger customer base, i.e. those looking for a premium phone without having to pay $700+, but it'll also build appreciation towards Windows Phone's hardware features. People will become accustomed to having PureView, Clear Black, PureMotion HD+, etc. and may seek to invest in that through high-end WP devices later.
Finally, the marketing opportunities around such a device are promising. You can use the PureView camera, Qi shells, different phone colours, etc. as a means to sell the Lumia 730 as something that speaks to the user's tastes and needs, as opposed to the off-the-belt Galaxys and iPhones. "It's the camera designed for your night out. It's the Instagram/Vine made for capturing those moments the way you saw them. It's Friday and we're going out, I'm going to take the Lumia [which is sitting beside a Galaxy]" Microsoft can also corner iPhone in the market it's aiming to carve out using the iPhone 5C as well as keep up with the momentum set up by Motorola/Google.
Better yet, if designed around Windows Phone 8.1 Microsoft then has a chance to really reign it in on the market. A $350 phone that gives you a taste of premium and the latest features, i.e. Cortana, will be of interest to everyone, even those tied into the iOS/Android market. I can see my brothers (iOS users) buying a Lumia 730 for the sake of having a Lumia 730, because it's cool and offers something without an inaccessible barrier-to-entry.