I love Motorola's Project Ara for modular phones - I just don't think it will work
Google's (NASDAQ:GOOG) Motorola division made a splash by unveiling Project Ara, its open-source modular phone project that will work with Phonebloks, a similar effort, to craft a system that will let users around the world customize the hardware of their phones.
It's an entirely laudable goal, both from an environmental perspective (Why throw out your whole phone when one component fails?) and from a user's perspective (Why wait a year to get a more powerful processor? Why settle for the camera your handset maker of choice decided to give you? Why not decide to jettison a camera altogether in favor of a projector?). It's not a new idea, either (see the failure of Modu). I just don't think it can get off the ground and practically function.
All of this comes down to generating and harnessing the enthusiasm of a massive group of people. They need to buy into the idea that customizing your phone, component by component, is worthwhile. If Google, Phonebloks and any of their partners cannot do that, their goal of "a more sustainable and democratic smartphone" is doomed.
A lot of this is going to depend on how Project Ara is structured, and that is still up in the air and will be determined by the feedback the project gets from the Phonebloks community. Motorola expects to have an alpha release of the Module Developer's Kit (MDK) sometime this winter. "There are a lot of ways this could take shape between what we have today--with no customization of an individual [smartphone] model--and of completely mixing and matching components," noted Reticle Research analyst Ross Rubin.
There are many examples of modular development in the electronics and machine worlds. The SEMA show brings together auto enthusiasts who build custom cars. The Xi3 Corporation helps build custom computers. Bug Labs even brings modular design to "Internet of Things" applications and components.
In all of these cases though, a small group of enthusiasts power the development. It's not a mass market phenomenon. What will keep Project Ara from meeting the same fate? At this point, it's not clear.
As Rubin noted, someone could decide to get a very cheap processor with a high-resolution screen, and get an unsatisfactory performance as a result. Presumably, there will have to be some limit as to which components consumers can mix and match to create their phones.
There are pluses and minuses to such a system. It could conceivably erode the brand power of companies such as Nokia (NYSE:NOK), which has focused in recent years in highlighting it imaging capabilities of its Lumia phones. If someone could get a camera module with similar optical imaging stabilization of the Lumia 1020 without having to buy the Lumia 1020, then Nokia's brand erodes. On the other hand, as Rubin noted, Nikon probably doesn't want to make a smartphone, but if its camera modules and optical components could become a module in Project Ara, why wouldn't it want that?
The main drawback of modular design is cost. "It's questionable whether or how this can work," IDC analyst John Jackson said. "We don't know about the cost basis of this type of operation. If I have to make a zillion different SKUs and have them ready for instant shipping, can it be replicated?"
It also becomes a chicken or egg question. Components designed for mass market smartphones can be reduced in price due to economies of scale. But with uncertain demand for components, the price is likely going to be higher than if someone bought a fully completed smartphone in a traditional store. The cost of bringing together various components is likely to be expensive. In this case, the phone may cost more as a result of the sum of its parts.
"You would need to reach massive scale before upgrading individual components--particularly for things like cameras and processors and probably radio modules, too--became practical from a cost perspective," Rubin said.
Google is pushing this likely because such a scheme would benefit the growth of the Android ecosystem, since Android is the only platform that can allow this to happen (think of the hundreds of device drivers that will need to be involved). Motorola likely wants it because it disrupts the integrated hardware model of a company like Samsung Electronics, which just so happens to be the biggest Android handset maker.
As I said, it's laudable. I applaud Motorola and Dave Hakkens, the creator of Phonebloks, for their vision. I'm skeptical though. "It looks like a science experiment," Jackson said. "We've seen things like this before, although never from somebody with the capitalization and competency that we see here."
I'll be rooting for Motorola's science experiment. I just won't be holding my breath.--Phil