Almost three years after we first saw Modu at Mobile World Congress, the tiny phone maker will close down next month. According to the Israeli news site Ynet, Modu raised $123 million and owes $21 million to an Israeli bank in addition to unpaid employee salaries.
Modu caught a lot of attention at Mobile World Congress in 2008 when it introduced the idea of a tiny modular cell phone (smaller than a credit card, actually) that you could insert in a variety of interchangeable "jackets." The jackets would transform the Modu into fully functional phone with real controls and bring a different identity and feature set. For example, a music jacket would turn the phone into a music device and a style-centric "night" jacket would give the device an abstract keypad and flashing lights.
Though I always saw it as an intriguing idea, Modu landed only in its home country of Israel and a handful of other markets. So though I'm not surprised, it is a bit disappointing.