It can't just be high-end devices like the Nexus One. The product managers at HTC obviously thought the same and launched the HTC Wildfire: this device offers a complete equipment (528 MHz, support for all networks, touchscreen as well as GPS) for under 300 euro (a retail price of 280 euro is communicated). The current Android 2.1 is used as operating system.
The only disadvantage: The display has a rather below average resolution of 320×240 pixels. If you can live with that, you'll get a current mobile phone with an open operating system without having to take out a loan. Ultimately, Android will gain market share (and thus also significance for the developers) via these mass models. Apple, on the other hand, only has one expensive model in its range and is likely to come under further pressure.