Rethinking the Cell Phone

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Greengart is skeptical that the Modu will take off. "It makes sense on paper, but in the past, every effort to create modular types of devices has failed because [the companies] miss the way consumers actually buy products," he says. "It requires a change in consumer behavior ... Consumers don't buy [multiple] modules at once or have the foresight to know that they're going to want more ... down the road."

Modu Mobile hopes to buck the trend by getting people used to thinking in terms of jackets and the Modu. "We want to educate the market on the flexibilities and offerings," says Sherman. The company's first products will be available in October in Italy, Russia, and Israel. The initial package, which will include the Modu and two phone jackets, will cost 200 euros, an amount that the company expects will be subsidized by cell-phone carriers. In 2009, the company will extend to operators in the rest of Europe and in the United States, Sherman says.

Greengart admits that by inking deals with major carriers in the three initial countries, Modu Mobile has overcome one of the hurdles in making a marketable phone. "Oftentimes, the biggest challenge with a mobile device is just getting it in front of the consumers," he says. "They have carriers in Israel, Italy, and Russia. We'll see how much weight they put behind it."

The Modu is a different idea, and "the industry could use more 'different,'" Greengart says. But it will be hard for the company to gain traction in the mobile market and, especially, compete with Apple's popular iPhone. "I hate to say it because it sounds cliché," admits Greengart, "but no matter what jacket you slip this thing into, it's not going to be an iPhone."