Israeli phone maker Modu to shut shop

Wednesday, January 19, 2011, 7:17 by Tech Correspondent

Israel-based Modu, best known for its unique mobile phones, plans to shut shop in February 2011.

Modu has 30 employees and all of them will be laid off. Modu wanted to raise capital in Israel but its attempt did not succeed and result is in front of us today. The company has no other option but to close shop. Modu currently owes around $123 million to investors and another $21 million to the Israel Discount Bank. Also, it is said that the employees working there have to fight to get their salaries.

Modu is a company which makes miniature phones, which can be plugged in to various accessories and “jackets” like sports or music to enhance the capabilities of the phone. In 2008, Modu startedlaying off its employees and recently it was in news for failing in the attempt of making their company public. The company has not been doing well since long.

modu t phone photo

Photo: Modu T phone

In 2009, Modu had targeted $100 million in revenues. The company had planned to issue stocks back in November 2010 and had planned to expand its phones to countries such as Nigeria and Romania. But company’s approach seemed to be going wrong. It was busy in making modular but power-limited phones and experts believe that this is the key reason for its failure.

However, Modu did come out with a few interesting cell phones. Modu along with Micromax has launched a phone called, Modu T. It is the lightest smartphone ever. In fact, Micromax had a tie-up with Modu to sell their Modu T phone in India under the Micromax brand. The Micromax Modu T phone was designed in such a way that users could plug the phone into a jacket, which would enhance its features. It runs the Brew OS and is 3.5G complaint. Also, the company added to its 2008 model with a touchscreen version based on the Brew platform and a Wi-Fi only Android model.

It is not that Modu was a complete failure. The company made modular designs that could change the phone’s functions by replacing its outer shell, or jacket. So, was Modu trying to go far ahead of its time? Well, may be yes. The idea behind its concept of modular designs was good and if it was executed well with the right technology and lower costs, it could have worked pretty well. We think that Modu’s approach and execution was wrong, not the concepts.

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