modu Rewrites the Mobile Landscape with World´s First Modular Phone

modu today announced a fundamental shift in the mobile handset
industry by launching the world´s first modular mobile phone,
supported by variety of ecosystem partners. At the heart of the
ecosystem is modu - a tiny, sleek mobile phone that is fully
functional and easy to use. The modu can be slipped into a wide
variety of modu jackets - stylishly designed phone enclosures - and
modu mates - modu-enabled consumer electronics devices. modu´s
ecosystem offers boundless possibilities in a simple and affordable
way.

Leading mobile network operators (MNOs) with a total of tens of
millions of subscribers have already committed to modu, signing
strategic partnerships that will see the first modu products available
in the fourth quarter of 2008. The MNOs are Telecom Italia´s mobile
division TIM, BeeLine (VimpelCom) of Russia and Cellcom in Israel.

modu ecosystem partners also include mainstream consumer
electronics manufacturers who have signed up to develop modu mates
such as MP4 players, digital photo frames, cameras and DECT phones ,
enabling best of breed functionality coupled with modu´s personal
communication experience. One of the first such partners is car
multimedia and navigation leader Blaupunkt.

Lifestyle, entertainment and fashion brands - including the
world´s largest music company Universal Music Group - are also part of
the modu ecosystem, partnering with modu to design stylish and
customized modu jackets.

modu, which was set up in 2007 by leading technology innovator and
entrepreneur Dov Moran, the inventor of the USB Flash Drive and other
ground breaking personal storage solutions, has developed a mobile
phone that promises to transform the way people buy, use and enjoy
personal communication.

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

"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."

For MNOs, the benefits of partnering with modu are numerous:
modu´s business model gives them an additional opportunity to engage
in a positive dialogue with their subscribers by offering the choice
to affordably change their phone a few times a year; MNOs can also
create and build new communities among their subscriber base, leading
to increased usage, additional handsets, greater loyalty and reduced
churn.

Dov Moran added: "modu is all about creating partnerships and
opportunities and making new connections: for consumers, for
operators, for big brands seeking a meaningful profile in the mobile
market and for established consumer electronics businesses looking to
realize the full potential of personal communication."

modu is already attracting widespread support from leading players
in the mobile and consumer electronics markets.

SanDisk

Eli Harari, CEO and Chairman of SanDisk Corporation, the leading
flash storage card manufacturer, said: "modu is a disruptive concept
in the well established mobile market. The modu proposition is unique
and compelling to consumers, mobile network operators and consumer
electronics companies alike. We are happy to participate in this
exciting journey. "

Telecom Italia

Paolo Paganucci, VP Scouting & Benchmarking of Telecom Italia,
adds: "The industry abounds with success stories in which a specific
application (for example e-mail, GPS navigation, music on the move,
etc.) is identified with the vertical device. On the other hand,
operators´ and customers´ dreams of the "Swiss army knife" handset is
currently a letdown from the perspective of the customer experience
especially on innovative services.

"The collaboration with modu goes in the direction of overcoming
this dichotomy, thanks to a new paradigm which gives the possibility
to change the customer experience of the service without changing the
device. The customer will be able to choose the preferred ergonomics
and functionality that best suits his needs in any particular moment
and context."

Texas Instruments

"modu has developed a truly disruptive business model that is
exciting for everyone in the mobile phone industry, and is driving
change and progress with its unique and innovative ecosystem," said
Remi El-Ouazzane, Vice President, Cellular and Connectivity System
Solutions, Wireless Terminals Business Unit, Texas Instruments. "TI is
committed to helping modu succeed and is excited to help them deliver
a unique offering to the marketplace."

Universal Music Group

Rob Wells, Senior Vice President, Digital, Universal Music Group
International, said: "What modu have done is incredible. Their
revolutionary platform has opened up mobile phones to new music
products and services that simply didn´t exist before modu came along.
UMG takes the mobile channel seriously, and our strategic partnership
with modu reflects the potential we see in this dynamic and exciting
market."

VimpelCom (Russia)

Kent McNeley, Vice President and Chief Marketing Officer at
VimpelCom, said: "The modu proposition is just the boost the mobile
industry has needed for some time. It is both unique and compelling
and is sure to resonate with our millions of subscribers.

"VimpelCom is 100% behind the modu mobile concept and the
agreement means we can work closely with the modu team to shape and
exploit this spectacular innovation for the benefit of both
businesses, as well as consumers across Russia and the CIS
territories."

NOTES TO EDITORS

About modu

www.modumobile.com

modu was established by Dov Moran and several of his colleagues
from msystems, a company he founded and sold to SanDisk in 2006 for
$1.6B. modu´s vision is to bring a fundamental change to the dynamics
of the mobile phone industry. The company is dedicated to developing
products, technologies, a wide ecosystem and business relationships
that will help realize that ambition. modu will have its official
launch at the Mobile World Congress, being held in Barcelona, Spain in
February 2008.

modu gives users the freedom to choose a new phone as often as
they like, meeting their changing needs, preferences and style- easily
and affordably. At the heart of the modu ecosystem is modu - a tiny
and sophisticated mobile phone. modu can be slipped into a wide
variety of modu jackets - stylish phone enclosures that enable users
to create a new look or design and provide added functionality. modu
can also slip into modu mates- consumer electronic devices that are
modu-enabled - allowing users to create an entirely new communication
experience.

Mobile World Congress

modu will be exhibiting at the Mobile World Congress in Barcelona
from Monday, 11th February until Thursday, 14th February:

-- Hospitality Suite: Z6.2

-- Booth: 7E46

-- Fira de Barcelona

Avenue de la Reina Maria Christina

Barcelona, Spain 08004