The modular phone dream - Can LG and Google do what modu failed to do?


last week in I/O 2016, Google announced that developer units of Ara Phone will be available on fall 2016 and consumer launch is expected in 2017. This is exciting news about this project that for some time wasn't clear if actually going to happen.

3 months earlier, in WMC 2016, LG announced their own modular phone, the G5.

Why now? Is it because we, the market, are actually tired of the classic iPhones and Galaxies and ready for the next big thing? Or is this some sort of marketing stunt, non-profit innovation effort or brands powerplays?

These latest launches are not an innovation surprise. Both G5 and Ara are working on this for quite a while and similar in concept to what modu introduced back in 2007 - physically switching or adding elements in the phone to enhance different experiences. Not to mention the physical "play" experience (extract and insert) it has by itself.

I was one of the first workers in modu, an Israeli startup that dreamed to disrupt the mobile market with "the next mobile phone and mobile UX". The idea was to introduce a physically modular phone that fits to our modular lifestyle. The phone itself was a very small unit that you can slip inside different "jackets" to enhance different experiences, based on your needs. A camera jacket when you want to take best pictures in your day-trip, a sports jacket when you go out for a run or a 'boombox' jacket when you want to party with your friends in a picnic. When you look today at Ara and G5 you identify the same behaviors.

It started back in 2007, when the best phones out there were still Blackberry Curve and Nokia N95 and when iPhone first generation was just released (June 29, 2007). After raising over 100 million USD, few years later in 2011, modu was closed and Google purchases modu's patents for 4.9 million USD (that probably serve them today with Ara's IP).

When discussing modular mobile phones, or actually any new mobile phone user-experience to that matter, there are 2 main questions to be asked:

  1. Is the idea good (or good-enough)? In other words, is there a market for it out there?

  2. Assuming there is a market, who can disrupt or conquer it?

According to Wikipedia there are approximately 170 mobile phone manufacturers around the world, however, the global mobile phones market is controlled by several power players. You all know their names because you got their phones next to you on the desk or you actually reading this post in them right now... Every change in the mobile phone manufacturers top chart is dramatic and usually involves a giant dropping out (e.g. Nokia, RIM) or a giant joining (Micromax recently joined the top 10 global mobile manufacturers as they are a 2 Billion USD revenue Indian company and control 15-20% of the Indian mobile phone market share).

Comparing to SW, where new or small players rise and succeed constantly (for example: content curation technologies market is controlled by 2 Israeli startups - Outbrtain and Taboola. Kaltura, another Israeli startup and where I work, is leading the video technology market), Consumer Electronics in general is a tougher playground to play in. Production cycles, materials and manufacturing costs, regulations (especially in mobile) and other reasons make sure of that. However, in some new and unconquered domains (like drones or wearables) it might still not be the case, and small companies can still stand a chance. But the fact is that disrupting the mobile phones market is almost an impossible mission if you are not a giant. It is true for 2016 and the current landscape and it was probably the case all the way back to 2007.

In the following years after modu and before 2016 Google and LG launches, several others tried. Have you heard of PuzzlePhone, Fonkraft or Fairphone? Only if you are really into modular phones... Fairphone is another modular phone, made by a small Dutch startup. Not quite the same concept as Ara, G5 or modu's, yet a modular phone for sustainability and lowering environmental impact. First version was introduced back in 2013 and even had some success - they sold 60,000 units. Second version is due in 2016. Few tens of thousands is surly better than none, but not a revolution nor disruption. A niche market or use-case at best. That is definitely wasn't modu's goal with its 100 millions USD and I doubt LG and Google are also building their own phones for that amount of sales.

What am I saying?! That there was no chance for modu so succeed?! Basically, yes (How easy for me to sit by my computer nowadays and write something like this...). So giants like LG and Google didn't invent this but they are the ones to make this dream true, if it meant to be.

Is it meant to be? The "believers" will say that the fact that modular phones concept is here with us for almost 10 years now, proves there is a need for it out there. The fact that power-players like LG and Google are taking part of building it gives that extra validity (the fact that Ara is the first phone that Google is going to actually manufacture is interesting by itself). The skeptics would claim that mobile phones are taking much bigger part of our lives and the manufacturers/OS/operators keep thinking of ways to innovate and disrupt, and sometimes they take it too far...

I personally can't wait to see if someone will actually make the dream I was once part of, come true.

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