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A couple of weeks ago we looked at Acer's neoTouch S200, its latest high-end handset that features a ferociously quick 1GHz processor and a high resolution screen. The E101, however, sits at the other end of the scale in the firm's new line-up of smartphones. You can pick it up online for around £165, which makes it the cheapest Windows Phone currently on the market. Obviously, to build a handset for that price Acer has had to make some significant compromises, but the question is, has it made the right choices in which areas of the phone to scale back?

Certainly in terms of looks, the E101 doesn't give off the air of a budget handset. Sure the body is made from plastic and doesn't feel quite as sturdy as the iPhone or Nokia E52, but apart from the slightly flimsy battery cover it's actually quite well built. It measures 113 x 56 x 12.8mm and weighs 118g, plus it's pretty stylish, too, thanks to its clean angular lines and glossy black finish. And we like the way it's not laden down with unnecessary buttons like some of the models in Acer's previous range. On this one, you simply get a power button at the top, a volume rocker and lock switch on the left-hand side, and a button for the lowly 2-megapixel camera on the right-hand side. There's even a stylus tucked away along the left side.

This is all pretty traditional stuff, but the controls on the front are a definite change from the norm. Instead of the usual four-way D-pad, the E101 has a touch scroll wheel. This acts much like the touch wheel on the iPod Classic, so gliding your finger around it moves up and down through the various menus. And as it's also clickable, you can use it as a standard four-way D-pad if you want. Overall, we think the touch wheel works really well and is especially useful when you're trying to navigate menus one handed. Along with the wheel there also the usual four Windows Phone buttons: Home, Back and two soft keys. Although these initially look like touch buttons, they're actually traditional buttons, but as they're very responsive this isn't an issue.

Acer has kitted the handset out with a Qualcomm MSM 7225 processor that's clocked at 528MHz. It's similar to the processors that HTC has been using in its Windows and Android phones over the last year or so. While it's obviously not in the same league as the 1GHz Snap Dragon CPU Acer uses on the high-end S200, it's no slouch either and the handset felt reasonably sprightly to use. On the memory front, there's 256MB or RAM and 512MB of ROM. Naturally, you can also add more storage space by sliding in a cheap microSD card into the slot hidden behind a small plastic flap on the right-hand edge of the phone.

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