It takes a lot of work, time, and skill to port a full Linux OS to an embedded device like a cell phone; and that is assuming perfect conditions. You usually would want to make sure that the target platform will have some tangible benefit running Linux, and I just don't see that for a cell phone. It's not like you can really do much but place calls with it.
I would also have to question the idea that this would be the cheapest SBC available. I don't know about anyone else, but the last 2 or 3 phones I have had cost over $300. Even then, none of them had the kind of power you would need to run a practical OS. Trying to run Linux on the low-end phones that they give away with new contracts would be a grand waste of time. You could be better off getting a Zaurus (you can get a SL-5500 for ~$130 on eBay) that is going to be a lot more practical of a platform for mobile computing.
If you really want Linux on a cheap phone, you might want to keep your eye on
OpenMoko.