from the March 2008 issue

Modu to launch tiny Phone Modu

A new concept: a tiny cell phone that pops into interchangeable jackets to become a bigger, smarter phone - or into other gadgets to connect them to the Internet has been adopted by wireless carriers in three countries.

The company, Modu, launched the phone, also called Modu, with Telecom Italia SpA in Italy, OAA Vimpel Communications in Russia and Cellcom Israel Ltd.

Telecom Italia Mobile and Cellcom are the largest carriers in their respective countries, while VimpelCom is the second-largest in Russia.

The Modu is slightly smaller than the current iPod Nano and weighs 1.5 ounces. It has a small color screen and a limited keypad, which allows it to work as a rudimentary cell phone on its own.

The jackets that will come with the Modu look like cell phones, with standard numeric keypads and other features like cameras. But they they lack the antenna and chips that communicate with a wireless network, and this is where the Modu comes in - it pops into a slot, turning the jacket into a fully functional phone.

The jacket is cheap to make, has almost no electronics, and doesn't need to be tested by the carrier to see that it conforms to its network standards.

Dov Moran, the company's founder, estimates that carriers will be able to sell a Modu and two jackets as a bundle for about $280, a price that they can then subsidize down to free or almost free with a two-year contract.

The jackets that will be available at launch in the other countries reflect the differences between them. The Russian carrier wants an emphasis on kids, who are the big growth market for cell phones there, so Modu is making jackets with cartoon themes for them. The Israeli carrier wanted a cell phone for soldiers, so Modu is making a rugged, green jacket with a built-in flashlight.

Modu is also talking to consumer electronics companies like Magellan Navigation Inc., a California-based maker of Global Positioning System devices, and car-stereo maker Blaupunkt, a unit of Robert Bosch GmbH of Germany.

The idea is to have consumer electronics companies build slots for the Modu into their devices to give them network connectivity. That could allow a GPS device to receive updates on traffic or map changes. A picture frame with a Modu slot and loud speakers could act as a music-playing, picture-showing charging station.

Reprinted from the Israel High-Tech & Investment Report March 2008

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