Robin at TC writes:

Modu, the heavily-funded Israel-based modular phone manufacturer that enables you to slip a light mobile device into a variety of so-called “jackets” (think music players, other cellphones, car stereos, digital cameras, etc.), is prepping its big commercial launch for this year by unveiling its family of phones at the upcoming Mobile World Congress. The actual sales for the device will start at the beginning of next quarter.

Modu started teasing everyone in January last year, and revealed what it had in store a month after. Crunchgear’s John Biggs dubbed it cool but flawed, but this was all way before the company ever had something to show for its promises and – meanwhile – over $85 million in venture capital funding. Well, now they do.

At the heart of the Modu ecosystem is a small modular mobile phone (the lightest one available according to the Guiness Book of World Records) that comes with complete mobile functionality but also doubles as both a music player and a mass storage device (2 GB). The modu phone boasts a seven-key keypad to perform basic functions even without a jacket, but it’s really the jackets that make the product unique.

Straight from the press release, the freshly unveiled Modu jacket line-up includes:

• Night jacket: inspired by the nightlife scene, this jacket includes futuristic styling with an edgy keypad, flashing lights, night mode imaging and a unique graphical user interface
• Street-art jacket: capturing the expressive and vibrant street art scene, this jacket fea tures stereo speak ers and dedicated music keys for a powerful music experience
• Classic jacket: designed to fit the everyday needs of a modern lifestyle, this jacket carries all essential mobile communication features with an air of elegance and fine taste
• Express jacket: this jacket transforms the modu phone and user interface with a rain bow of fun, playful flavors

The Guinness Book of World Records has named the Modu mini phone “the lightest mobile phone in the world.” The phone, which we saw at MWC this year, weighs a mere 1.4 ounces and is .3 inches thick. Modu received a $100 million cash infusion last week.

The phone, as you’ll remember, works as a standalone mobile device or fits into different “jackets” that basically take control of the mini core and can act as smartphones, game phones, or music phones. Expect Modu to hit the US late this year or early next.

Product Page

The idea is this: Modu makes the modules and sells an SDK to manufacturers like Bosch and Magellan, two actual partners. The partners write a few GSM hooks into their firmware and to make calls, pick up SMSes, and get data. You buy a module and two jackets for about 200 euro in shops and then buy additional jackets — media players, GPS devices, vibrators, etc. — as needed.

My concern is this: the market is ruled by handset manufacturers who will not cede territory to a wee start-up. The buy-in for the consumer is fairly large. I have to invest in the phone and the jackets and hope that the company doesn’t go belly-up in the next few years and that partners keep releasing jackets. As a manufacturer, however, I have the chance to make and sell all my same products but easily, and without FCC approval, add the powers of a cellphone to my gear. I could add Modu compatibility to almost anything, provided I follow the recommendations and get certified by Modu. My time to market is about four months rather than two years.

They expect product to ship early next year and they already have carriers in Italy, Russia, and Israel interested in the product. Founder Dov Moran knows the industry — he was one of the grandpaters of the thumb drive world — and he has a good team. I only fear that skittish consumers will forgo buying a tiny phone with no track record and a bunch of CE stuff that only works with that phone. Then, add in the possibility of doing this all over Bluetooth or near-field communications, without a physical module, and you’ve got some heavy competition. I accept the the concept but I worry that this won’t get far past this initial stage. Only time will tell.

Product Page

Modu, the mysterious modular cell phone doohickey that we told you about a couple weeks ago, “is set to announce Thursday that it will launch the phone, also called Modu, on Oct. 1 with Telecom Italia SpA in Italy, OAA Vimpel Communications in Russia and Cellcom Israel Ltd,” according to the Associated Press.

The Modu system consists of a small iPod Nano-sized module that works like a very basic cell phone and can be popped in and out of “jackets” that allow it to do bigger and better things. For instance, you can have a jacket in your car, a jacket in your office, a music playing jacket, and more.

Modu founder Dov Moran expects Modu to sell for roughly $280, which includes the main module and two jackets. This price can and likely will be subsidized by the various carriers “down to free or almost free with a two-year contract.”

What’s interesting is that the jacket concept can be approached differently depending on the country.

Modu founder Dov Moran said in an interview that the Italian carrier is excited about the concept because it can make cell phones more like fashion, tempting consumer to update their looks every few months… 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.

Other jackets could focus on music, coming with pre-loaded tunes, or have full keyboards for texting. Universal Music Group said it is looking at making jackets that center on its artists.

Moran says that Modu won’t be able to launch here in the US until 2009 at the earliest. Also, the initial Modu offering uses painfully slow GPRS data but the company is already at work on an HSDPA version so maybe that’s the version we’ll see here.

Modu to Launch Tiny Phone ‘Module’ [AP]

Modu is a device with the absolute bare minimum in terms of cellular telephony. It can make a call, send SMS and hold a contact list. Its small size is due mainly to the fact that it holds just these most basic telephony capabilities. Think of it as an expanded SIM card.

WiFi is not included, storage may not be either.

This is where 3rd parties come in. The idea is that the user will carry this core device and stick it into a variety of “skins”. These can be anything… For example, a camera that with the Modu core can send pics directly to your mom.

The “skins” will cost less because they could be produced without telephony functionality. This could take the iPod accessory ecosystem and the concept of the iPod tax to a whole new level and platform.

Modu

Feel free to call me cynical but I’ve seen this video a thousand times — remember Origami? — and the concept of a take-it-with you ID built-in to various CE devices like phones and apparently GPS receivers is compelling but almost impossible in reality. Look for more info at DEMO next week but I’m calling bullshit.

via TC