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A few years back, Modu was considered a hot Israeli company. Headed by Dov Moran (pictured), the company created what it called the world’s lightest phone and made modular designs that could change the phone’s functions by replacing its outer shell, or jacket.

If there’s a lesson here, it’s probably that there are consequences to being ahead of your time. But the idea may not be dead forever. If someone picks it up and executes it when the technology is ready and the cost is lower, it could very well work.

The plan was for Modu to mix and match modules, or Modu jackets, to create phones with different features. You could, for instance, use modules to create a music player, a phone, or a navigation device. But now that plan is in big trouble. Modu is likely to shut down, according to Israeli news site Ynet. Employees have filed requests with Israeli courts to recover back pay that they are allegedly owed.

In November, the press reported that the Kfar-Saba, Israel-based company had canceled its initial public offering and had begun laying off most of its staff. A skeleton crew will remain in place to sell off inventory. Modu reportedly owes $21 million to the Israel Discount Bank in addition to the money owned to employees.

Founded in 2007, Modu announced its tiny cell phone and jackets in 2008. Back in 2009, Modu looked promising as it targeted $100 million in revenues. The company announced two phones, the Modu T phone and the Modu W phone, which was Wi-Fi only. I recall that the phones Modu showed me — very early production prototypes — were among the ugliest I had ever seen. But as you can see, Modu eventually got the hang of creating cool-looking phones.

The company could close its doors by February.


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