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Modu lays off a quarter of their workforce – did they misjudge the mobile phone market?

TechnicalMarkus Posted on: November 27th, 2008
Posted by: TechnicalMarkus in Editorial Opinions

Modu reportedly lay off quarter of workforce - modular mobile phones NOT the future?Way back when (well, in February), we ran a story on Modu, a company aiming to bring modular mobile phones to the market. They had potential, they had a fighting spirit, and they had a unique offering for people who wanted something a bit different from their mobile phones. Put simply, they made a tiny little mobile phone module, that you could slot into other ‘jackets’, like a USB Modem sleeve, or a top-end camera phone sleeve, or whatever, the idea being that the jackets gave you your extra features like camera, or media player, and so on.

However, it’s beginning to look like we might not ever see those modular mobile phones, as news has come through today from Engadget Mobile, reporting that Modu have laid off 25% of their workforce. That doesn’t mean they’re out of the fight, yet, but it does make things distinctly harder for Modu.

The question we have to ask, though, is why Modu have been forced to make this not particularly pleasant or happy decision. Well, the obvious (but not necessarily right) culprit would be the failing economy, but it may in fact be down to their mobile phones being delayed for launch, and a big factor surely has to be the fact that Modu haven’t snagged any operator partners for their mobile phones.

However, I reckon there’s one big problem with their mobile phones that’s been overlooked, and it rocks the whole business model down to its core.

Before I get into it, though, I want to make it very clear that I like the Modu idea. I think it’s very, very clever concept, meaning people can change the functionality of their phone, and basically get a whole new phone, just by buying a new jacket, and not by having to splurge on, well, a whole new phone. It’s probably one of the most original and cool ideas I’ve ever seen introduced to the world of mobile phones. It is, in fact, Modu’s biggest strength.

The problem is, I reckon, it’s also their biggest flaw, and if it did come to market, its biggest selling point could ironically be its Achilles Heel. Modu famously had a pop at Nokia, saying that Nokia’s philosophy of building everything into one handset was flawed, and made their mobile phones stale. A thought occurred to me when they said it: maybe that’s what people want

The big buzz word in the technology world (not just with mobile phones but with everything) is convergence. Loads of different devices coming together to make one device that does everything. It’s clearly something people are excited about, and want to buy into, or how would you explain the popularity and success of mobile phones like the Sony Ericsson X1, the T-Mobile G1 and the Apple iPhone 3G? A lot of people want a mobile phone that will do everything, in one, compact box.

And there’s the issue, right there. The Modu mobile phone is the absolute opposite of that, in that its main ‘box’ is an utterly basic phone, and to get the extra, super-duper functionality that a single, converged smartphone brings, you have to buy, and carry around with you, lots of extra jackets. You have to buy a jacket with a top-end camera in it, another jacket with a top-end music player, yet another jacket with a QWERTY keyboard, and so on, something you very notably don’t have to do with, say, the Blackberry Storm. Modu argue that people want excitement and a phone that isn’t stale, and can have functionality added with a new jacket. I would argue that people want a mobile phone that already does everything without them having to buy loads of extra bits, which they’ll have to lug about with them, and which they’ll probably lose.

So, is that the reason why Modu haven’t got any operator support? Is it because their business model is flawed, and they’re moving away from what the market for mobile phones is moving towards? To put it simply, would people rather buy the Blackberry Storm, that does everything in one device; or the Modu phone, plus the 20+ separate jackets needed to make it do what the Storm does in one box?

To me, the answer is a very simple one…

Get the mobile phone that does everything in one box; grab yourself the Blackberry Storm today!

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