It was back in January this year when Modu Mobile first revealed the video teaser, and two weeks after that release, the big announcement was made. Modu even brought a whole plane full of the start-up employees for a one day visit in 3GSM Mobile World Congress in Barcelona. Everything was bright and promising for Modu.
Modu Mobile was (and still is) a big promise/potential. Its revolutionary concept, a modular mobile phone with “Jackets” and “Mates” that change its purpose utilizing its mobile abilities and its memory. There were disappointments that the first generation will not be a 3G phone but still, it was obvious that Modu’s product has the potential to lead a revolution of a lightweight basic unit that connects and corresponds with other devices.
Almost a year later and the first modular phone’s future is unclear. Here are some developments that from our perspective show there are serious problems in Modu, problems that have a bad effect on one of the biggest promises of the Israeli and mobile market.
Layoffs- In just two week, the company fired in two cycles 100 workers, and some executives. That’s about 25% of the company working staff.
Do not get me wrong, layoffs in this time can also project managerial responsibility towards the problematic state in the markets. But it is a massive hit to a company that its first product should be out soon and just until recently was recruiting in a crazy pace.
Launch delays- When the Modu was officially announced the company said that the first devices would hit the market on October 1st, 2008, since then the date changed and it was assumed that we could buy the device on Q1 2009.
Today in an interview Dov Moran, the CEO and Co-founder, said that the device will only be available on April. This statement is actually to say that the launch date was delayed by 6 months.
Operators- At first, Modu announced that three operators will launch the device at the same time, Cellcom (Israel), TIM (Italy), and Vimpelcom (Russia). Time passed and after the first delay of the launch, it seems Cellcom will be the first to launch and TIM and Vimpelcom will come second (meaning they will wait).
This launch resembles what Apple aimed to when launching the first iPhone in the states, but in Apple’s case, that was their strategy and not a misfortune.
It seems that TIM and Vimpelcom are waiting to see if the launch in Israel is successful and will decide only afterwards if and how to deploy.
Advertisement of the launch- Modu sent a request to two major publicity agencies in Israel (with a global ownership) to send them a price quote on the Israeli launch campaign.
That is a bit strange, Cellcom will be the first to launch the device and it is expected that they will worry for the marketing side to their customers with ads and promotions. This step can be interpreted as a lack of commitment / security on Cellcom’s side.
All that being said, Dov Moran is an established business man with a brilliant record from M-Systems and with great connections. Modu still has a large sum of money in their bank and there are many skilled professionals still working in Modu. Bottom line, I hope that Modu Mobile will pass these bumps on the road and leaves as a triumphant from these challenges.
