modu and Universal Music Group Set to Rock the Music Phone Industry

Business Wire, Feb 7, 2008

modu concept is a breakthrough which enables a larger than ever variety of uniquely designed music devices, enhancing the user - artist interaction

KFAR-SABA, Israel -- modu and Universal Music Group (UMG), the world's largest music company, today announced they are jointly exploring the development of a range of mobile devices (modu jackets) that will feature some of UMG's best-known artists.

UMG is the first music company to exploit modu's unique and revolutionary mobile phone concept, which allows consumers to use a slimmed down, standalone mobile phone, and then enclose it in an endless variety of modu jackets and modu mates to reflect their individual mood, personality, tastes and need for functionality at an affordable price.

The jackets, designed with unique, artist specific attributes, will have differentiated physical expressions as well as fast and simple access to preloaded content and\or music subscriptions.

The first music jacket is expected to be available towards the end of 2008, when modu's mobile network operator partnerships become operational and modu devices are available to consumers.

Jacob Shama, Vice President of Value Added Products at modu, said: "This is new territory for the mobile industry, and for the music industry. Music jackets incorporate mobile phone features along with strong artist identity and music content. Music jackets can be offered in very large varieties at affordable prices. I am excited to see how modu opens up the mobile market to labels, artists, bands, lifestyle and fashion brands giving them a solid platform to engage directly in a tangible way with their consumer base and communities."

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."

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

About Universal Music Group

Universal Music Group (UMG) is the world's largest music company with wholly owned record operations or licensees in 77 countries. Its business also includes Universal Music Publishing Group, the world's leading publishing company. UMG's labels include Decca, Deutsche Grammophon, Interscope Geffen A&M Records, Island Def Jam Music Group, Lost Highway Records, Machete Music, MCA Nashville, Mercury Nashville, Mercury Records, Philips, Polydor Records, Universal Music Latino, Universal Motown Republic Group, Universal South Records and Verve Music Group, as well as a multitude of record labels owned or distributed by its record company subsidiaries around the world. The Universal Music Group owns the most extensive catalog of music in the industry, which is marketed through two distinct divisions, Universal Music Enterprises (in the U.S.) and Universal Strategic Marketing (outside the U.S.). Universal Music Group also includes eLabs, a new media and technologies division, Bravado, its merchandising company, and Twenty-First Artists, its full service management division.

Universal Music Group is a unit of Vivendi, a global media and communications company.