Chinese OEM's Changhong H5018 will cost less than 1,000 yuan – or £99.
The phone will be made by Foxconn and powered by Baidu's own OS, Cloud, which is interesting given the commitment to Android made by close rivals Huawei and ZTE.
The 3.5 inch touchscreen Changhong H5018 will come with 100GB of cloud storage on Wangpan, the Chinese equivalent of Dropbox, and come with a range of cloud-based options.
These include Baidu Music, Baidu Maps and cloud-based voice and handwriting recognition.
The move should heat up the drift towards mid-priced smartphones in Asia Pac. Earlier today, a new report estimated there will be one billion smartphone users across the Asia 10 by 2015.