Google is bringing out Project Ara shortly and while the idea of a modular phone is interesting, the concept of building modular things is hardly old. IBM had a project called the Modular Computer and it was actually manufactured for a time in Europe but it didn’t survive. Chrysler had the K Car, a largely modular design and it didn’t work out either (mostly because the cars were ugly). Now that doesn’t mean modular can’t work and there is a compelling core benefit to the idea. Let’s chat about Project Ara this week.
PCs were actually designed to be modular you could change out motherboards, memory, storage, graphics cards and even change the case. The problem was that this often wasn’t plug-and-play - you could build a PC that didn’t have this capability cheaper and make it smaller. If you look at that tower computer under your, or someone else’s desk, it’s mostly air and that is so it can deal with the variances of heat, size, and power that exist for the various components. The more flexible you make something the larger it must be and even with modular design the PC kind of got stuck on two basic configurations the tower and mini-tower. Not exactly the most attractive configurations particularly when compared to an all-in-one which generally isn’t very modular at all.
One of IBM’s modular concepts (later updated by Asus) had easy to plug in standard-sized cartridges but the problem was the standards. No one else wanted to use the same configurations which means you were largely stuck with what IBM made and ended up with something more expensive, less attractive, and without the promised flexibility that justified the device.
So to create a modular device that rises to the level of acceptance, you have to be able to drive standards and get components to ship in enough volume to keep costs competitive. Folks aren’t going to pay 20 percent more for a modular device - let alone the more common 100 percent premium that past attempts have created. The resulting product either has to be out of sight or attractive and not too difficult for a tower computer that can be slid under a desk – which is far more difficult for a phone. And you have to allow for different sizes in core components to deal with differences in power, heat, or process technology in order to get the flexibility you need.
As a result, I don’t think an OEM can do this because doing this within a single vendor, short of maybe Apple or Samsung wouldn’t get the economies of scale you’d need for the parts. That does make the effort more ideal for a Google or Microsoft (who applied for a patent on this technology in 2011) as they can drive standards across devices. In addition, the platform has to be able to adapt to unique configurations like Windows does to PC changes. Realize that for cell phones the idea of having to load drivers might scare buyers off so you’d clearly have to make it completely painless - if not invisible.
I bring up Tesla because the Model S is really the first modular car design that is truly successful and very similar to what Project Ara is attempting. It is an expensive car but this is largely due to the relatively low volumes in what is a very unique electric vehicle, in what is still largely a gas market. Having said that, the Tesla S is attractive, the modular nature of the components (which will shortly be applied to an SUV) work both for the manufacturer and for the user (you can upgrade an old Tesla S to a new one for a fraction of the cost of a new Tesla). But the flexibility of buyer choices seems to be below what you could get if you bought a Cadillac. (Though there is some work going on from Saleen and Rinspeed to showcase design flexibility other car makers couldn’t touch without going modular). I think this last can be explained by Tesla’s size, they don’t have the ability to deal with that level of variance yet and most buyers end up buying off the lot at a gas car dealer and having to make tradeoffs in order to get instant satisfaction. On the other hand, Tesla can’t build you a car in a day either - though the modular approach they are using could eventually provide that additional benefit.
I do think you can argue that for something large like the Tesla S, modular can work. But I have my doubts with something small like a phone.
Wrapping Up: Distribute the Components
When you come up with a new core technology, folks often try to fit it into the old format. The first gas cars looked like buggies without horses for instance. I think we are waiting for an engineer to realize that if you make a modular phone you don’t have to bundle the components of the device together. You could put the processor and primary power on a wearable component as part of a belt for example or display it on a wrist or head mount, or even focus on voice input or touch. Also, focusing on sound delivery into an earpiece is not that much different than a Bluetooth headset today.
So I think Project Ara has potential, we are waiting for a designer to realize that if the device is modular, it doesn’t need to look like the smartphones of today but instead the wearable computer of tomorrow. With a variety of wearable designs like Google Glass and a smartwatch being worked on at Google, they have all the parts to make this work. The next big smartphone design may, as a result, be invisible with most components concealed around your body.
President and Principal Analyst, Enderle Group
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