Israeli startup modu has announced a revolutionary new modular mobile phone design. It makes use of a tiny phone which can be slipped into a wide variety of modu jackets (a wide variety of stylishly designed phone enclosures) and modu mates (modu-enabled consumer electronics devices) for seamless operation.

"The mobile phone industry is ready for a revamp," said Dov Moran, modu’s CEO and founder.

"There are hundreds of handset models on the market: the trouble is that as a consumer you can only have one at a time and you are usually tied to a long and expensive contract. modu is challenging that with a solution that offers freedom, boundless possibilities and the opportunity to change your phone without it costing a fortune," Moran said, who is also the inventor of the USB Flash Drive and other groundbreaking personal storage solutions.

The Israeli company has already secured partnerships with industry power players such as SanDisk, Texas Instruments, Blaupunkt, Universal Music Group and carriers such as Telecom Italia, Israeli firm Cellcom and the Russian VimpelCom.

What the modu essentially did is took the core technology in a mobile phone and stripped it of any extras to make it very small. This tiny package then can interconnect with add-on sleeves and devices providing any extra functionality desired, such as a large screen or keyboard, MP4 player, and much more. This means that, much like in a PC for example, you can buy whatever accessories you need, without spending on things you would not use. Furthermore, it enables instant revamping and upgrade.

The user can thus build his own handset, personalized and perfectly suited for his needs. The modu phone module weighs only 1.3 ounces and is smaller than a credit card (slightly smaller than the current iPod Nano). The revolutionary gadget has officially been named by the Guinness Book of Records as the world’s lightest phone. The possibilities are limitless: from a rugged, green jacket with a built-in flashlight ordered by the Israeli carrier for soldiers, to jackets with cartoon themes for the Russian kids.

"This is the tip of the iceberg," says Moran. "This is a way to provide communications capability to any device."

Telecom Italia Mobile, Israel's Cellcom, and Russia's VimpelCom will launch the modular phone system in October this year, and modu hopes the phone will also hit the United States in early 2009, but no carrier deals have been announced.

Dov Moran has calculated that carriers will be able to sell a Modu and two sleeves as a bundle for less than $300, a price that they will probably be able to subsidize down to free or almost free with a two-year contract.