Turns out that the upcoming Windows Phone Tango update, besides lower screen resolutions, which we've heard from the very beginning rumors about it started, would also bring in the possibility to run well on less RAM, to the tune of merely 256MB, which is what 2010 Symbian devices like the Nokia N8 are using, for example.
Current Windows Phones, even the Lumia 900, sport 512MB of RAM and 480x800 pixels of resolution, as these are Microsoft's requirements, so introducing support for cheaper screens with lower resolutions, 256MB of RAM, and, presumably, CPUs slower than the 1-1.4GHz units we currently have, is likely to lower the price of entry level WP handsets significantly.
Which is precisely the point of the Windows Phone Tango update. Word on the grapevine is that Tango will also include support for folders directly on the start screen, and UI tweaks that will shrink the media controls and list them almost as small as notifications, so they don't take up that much space.
It's not entirely clear if the new 256MB of RAM allowance will result in less flashy UI for the upcoming wave of entry level Windows Phone devices with Tango, whereas the more capable brethren will keep all UI bells and whistles, or if Tango will be optimized across the board to look the same on all devices, but just be speedier on more powerful gear.
Anyway, it's pointless to guess, since Mobile World Congress is just a few weeks away, and we should know more pretty soon. Oh, and if the 256MB of RAM allowance materializes, it will confirm the change in Microsoft's mentality - with Windows 7 and especially Windows 8, Redmond actually focused on cleaning and optimizing the code, as opposed to demanding you buy a newer machine every time a major Windows version is out. Sign of the times.